The WTO Agreements Series

Agriculture

Third edition

The WTO Agreements Series Agriculture

World Trade Organization

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 The WTO
agreements series

The WTO’s agreements are the legal foundation for the international trading system that is
used by the bulk of the world’s trading nations. This series offers a set of handy reference
booklets on selected agreements. Each volume contains the text of one agreement, an
explanation designed to help the user understand the text, and in some cases supplementary
material. They are intended to be an authoritative aid for understanding the agreements, but
because of the legal complexity of the agreements, the introductions cannot be taken as
legal interpretations of the agreements.

The agreements were the outcome of the 1986–1994 Uruguay Round of world trade
negotiations held under the auspices of what was then the GATT (the General Agreement on
Tariffs and Trade). The full set is available in The Results of the Uruguay Round of Multilateral
Trade Negotiations: The Legal Texts. It includes about 60 agreements, annexes, decisions and
understandings, but not the commitments individual countries made on tariffs and services. A
full package of agreements that includes over 20,000 pages of commitments is available from
WTO Publications in a 34-volume set, as well as a CD-ROM, The Results of the Uruguay Round.

The volumes in this series Agreement Establishing the WTO Print version ISBN 978-92-870-4109-8
PDF version ISBN 978-92-870-4150-0
Agriculture ISSN 1020-4768

GATT 1994 and 1947 This publication will also be available

in French and Spanish
Sanitary and Phytosanitary Measures
© World Trade Organization
Technical Barriers to Trade Revised in 2016
 Contents
Introduction 3

The basic 5
structure of WTO
agreements

Agriculture 9
Agreement
An overview 9
Introduction to 10
the Agriculture
Agreement
Key principles: 14
The three pillars
Other provisions 30
Transparency: 33
Sharing information
The Agriculture 37
Committee
A database of 42
information on
agricultural trade
policies and
measures
Resolving disputes 43
 Negotiations: 52
built-in agenda and
Doha Round
Cotton 55
Summary 59

Frequently asked 63
questions

The legal texts on 71

agriculture
Agreement on 71
Agriculture

2013 Bali 103

Package on
agriculture

2015 Nairobi 121

Package on
agriculture
 Introduction

The WTO Agreement on Agriculture entered into force when the World Trade Organization
(WTO) came into being on 1 January 1995. Its main objective is to reform agricultural trade
so that it is closer to competitive market conditions — but also to serve other objectives.

The first steps in that reform are already in place. Developed countries phased in their reform
over six years from 1995 to 2000, developing countries (other than least developed countries,
who did not have to cut tariffs and subsidies) did so over 10 years, from 1995 to 2004.
The new lower limits on tariffs, domestic support and export subsidies are now locked into
place. Some countries that negotiated to join the WTO after 1995 implemented their reforms
after they joined, and some more recent members are still doing so. New negotiations since
2000, now part of the Doha Round, aim to make further reductions in tariffs and subsidies.

The “agricultural” products covered by the Agreement are specific to it. They include
processed food and drink but exclude forestry and fisheries products.

This publication explains the Agreement, which is part of a larger package of WTO treaties
signed in Marrakesh, Morocco, on 15 April 1994 at the end of the 1986–94 Uruguay Round
of multilateral trade negotiations. The package updated the agreements of the trading system
previously managed under the General Agreement on Tariffs and Trade (GATT, which deals
with goods and is legally known as GATT 1994), expanded their scope to include services
and intellectual property, and created the WTO. The Agriculture Agreement was also new,
and a result of the negotiations. A separate booklet, Sanitary and Phytosanitary Measures,
deals with a related agreement on regulations on food safety and animal and plant health.

The WTO Secretariat has prepared this publication to help the public understand the
Agriculture Agreement. The publication starts with a brief description of how the WTO
agreements relate to each other. Next comes a short explanation of why this new agreement
was negotiated and what it covers. The Agriculture Agreement and its key principles are then
described in some detail. This includes accounts of how they have been viewed in official
disputes, the main means of interpreting legal complexities in WTO agreements.

The publication turns next to the work on agriculture in the WTO, particularly the Agriculture
Committee. Reaching agreement is only the start of reform. Countries still have to implement
what they have agreed, and a crucial part of the WTO’s work is to allow governments to
monitor each other to see how well they are keeping their promises. That means they have
to share information with each other and to have an opportunity to discuss that information
— “transparency” and “peer review”. In agriculture, this is handled by regular sessions of the
Agriculture Committee. The committee also meets in “special sessions” for Doha Round

Agriculture 3
negotiations on the sector. The committee’s mandate, role and activities are described in
this section, along with the issues in the negotiations.

A separate section answers a number of frequently asked questions about the Agreement.

The publication concludes with legal and official texts in full: the Agreement, its annexes, the
2013 Bali ministerial decisions and one declaration on agriculture, and the Nairobi decisions
on agriculture. These include the historic decision to eliminate agriculture export subsidies
and set disciplines on export measures with equivalent effect, the most important reform of
international trade rules in agriculture since the WTO was founded.

In order to make the publication easier to read, the terms “country” and “member” are used
interchangeably for much of the text even though legally some members are “separate
customs territories”, and one member (the European Union) is a group of countries. This is
also in the spirit of the 1994 Marrakesh Agreement Establishing the WTO, which includes
this explanatory note:

“The terms ‘country’ or ‘countries’ as used in this Agreement and the Multilateral Trade
Agreements are to be understood to include any separate customs territory Member
of the WTO.

“In the case of a separate customs territory Member of the WTO, where an expression
in this Agreement and the Multilateral Trade Agreements is qualified by the term
‘national’, such expression shall be read as pertaining to that customs territory, unless
otherwise specified.” 
 The basic structure of
WTO agreements

The conceptual framework

Broadly speaking, the WTO agreements

for the two largest areas of trade — goods
and services — share a common three-
part outline, even though the details are
sometimes different (see Figure 1).

• They start with general disciplines

contained in the General Agreement on
Tariffs and Trade (GATT) (for goods), the
General Agreement on Trade in Services
(GATS) and the Agreement on Trade-
Related Aspects of Intellectual Property
Rights (TRIPS).

Figure 1: The basic structure of the WTO agreements

Umbrella AGREEMENT ESTABLISHING THE WTO

Intellectual
Goods Services
property

Basic principles GATT GATS TRIPS

Other goods
Additional details agreements and Services annexes
annexes

Countries’
Countries’
Market access schedules of
schedules of
commitments commitments (and
commitments
MFN exemptions)

Dispute settlement DISPUTE SETTLEMENT

Transparency TRADE POLICY REVIEWS

Agriculture 5
 Then come additional agreements
and annexes dealing with the special
requirements of specific sectors or issues.
These deal with the following:  the Agriculture Agreement in this area.
For goods (under GATT)
Agriculture
Regulations for food safety, animal
and plant health protection (SPS)
Textiles and clothing
Technical regulations and standards for
products (technical barriers to trade)
Trade-related investment measures
Anti-dumping measures
Customs valuations methods
Pre-shipment inspection
Rules of origin
Import licensing
Subsidies and countervailing measures
Safeguards
For services (the GATS annexes)
Movement of natural persons
Air transport
Financial services
Shipping
Telecommunications
• Finally, there are the detailed and lengthy
schedules (or lists) of commitments made
by individual countries allowing specific
foreign products or service providers
access to their markets. For GATT, these
take the form of binding commitments
on tariffs for goods in general, and
combinations of tariffs and quotas for
some agricultural goods. For agriculture,
6 WTO Agreements Series
the GATT “schedules” now include a part
containing countries’ commitments on
subsidies to support the disciplines of
For GATS, the commitments state how
much access foreign service providers
are allowed for specific sectors, and
they include lists of types of services
where individual countries say they are
not applying the “most-favoured-nation”
principle of non-discrimination.
Much of the Uruguay Round dealt with
the first two parts: general disciplines and
disciplines for specific sectors. At the same
time, market access negotiations were
possible for industrial goods. Once the
principles had been worked out, negotiations
could proceed on the commitments for
sectors such as agriculture and services.
Negotiations after the Uruguay Round
and before the Doha Round began in
2001 focused largely on market access
commitments: financial services, basic
telecommunications, maritime transportation
(under GATS) and information technology
equipment (under GATT).
The agreement in the third area of trade
covered by the WTO — on intellectual
property (IP) — covers general IP disciplines
as well as disciplines covering specific
IP areas, such as copyright, patents,
trademarks and geographical indications.
Other details come from conventions and
agreements outside the WTO.
The agreement on dispute settlement
contains specific procedural disciplines on
how to conduct WTO disputes while the
Trade Policy Review Mechanism aims to
ensure that WTO members’ trade policies
and practices are transparent.
Also important
One other set of agreements not included
in the diagram above is also important: the
two “plurilateral” agreements not signed by
all members: fair trade in civil aircraft and
government procurement. (Originally there
were four agreements, but those concerning
dairy products and bovine meat were
terminated at the end of 1997.)
Finally, members who joined the WTO since
1995 through the ‘accession’ route have
legally binding membership documents —
known as their “protocols of accession”
— which are an integral part of the WTO
Agreement. A protocol also contains legally
binding provisions that apply to the new
member.
–– 1C, the Agreement on Trade-Related
Aspects of Intellectual Property Rights.
Collectively, the agreements included in
Annex 1 are referred to as the multilateral
trade agreements since they comprise the
substantive trade policy obligations which all
the members of the WTO have accepted.
• Annex 2 sets the rules and procedures
for dispute settlement.
• Annex 3 provides for regular reviews of
developments and trends in national and
international trade policy.
• Annex 4 covers the plurilateral agreements
which are within the WTO framework but
which have limited membership.

Finally, the Marrakesh texts include a

The legal framework number of decisions and declarations on a
wide variety of matters that were adopted at
The conceptual structure is reflected in the the same time as the WTO Agreement itself.
way the legal texts are organized. The short
Marrakesh Agreement Establishing the
World Trade Organization sets up the legal
and institutional foundations. Attached to it
is a much lengthier set of four annexes.

• Annex 1 contains most of the detailed

rules, and is divided into three sections:

–– 1A, containing the revised General

Agreement on Tariffs and Trade,
the other agreements governing
trade in goods, and a protocol which
ties in individual countries’ specific
commitments on goods

–– 1B, the General Agreement on Trade

in Services, texts on specific services
sectors, and individual countries’
specific commitments and exemptions

Agriculture 7
 Agriculture Agreement
An overview
Historically, governments have intervened
in the agriculture sector more than in other
sectors. Agriculture was always covered
by the General Agreement on Tariffs and
Trade, which entered into force in 1948. But
numerous exemptions meant agricultural
trade escaped most of the disciplines that
applied more generally to trade in industrial
products. The result was the widespread
use of measures that obstructed imports
— import bans, limits on quantities that
could be imported (quotas), high import
duties, import duties whose rates varied and
so created market uncertainty, minimum
import prices, and various impediments not
related to tariffs such as regulations and
the activities of state trading enterprises.
Major agricultural products such as cereals,
meat, dairy, sugar and a range of fruits and
vegetables faced trade barriers on a scale
unseen in the rest of merchandise trade.
The exemptions also allowed huge subsidies
in richer countries. These artificially
increased production and exports from the
subsidizing countries, driving down world
prices. Farmers in developing countries and
developed countries with lower, or non-
existent, subsidies struggled to compete
with subsidised production and exports in
wealthier countries. Developing countries’
own governments often made life worse for
their farmers by taxing exports or requiring
purchases at low prices. These policies
seriously distorted agricultural trade.
Traditionally, GATT negotiations had focused
on opening markets. In agriculture, it became
increasingly obvious that the problems were
much broader. When the Uruguay Round
negotiations were launched in 1986, the
reform programme for agriculture aimed
to tackle the sector comprehensively. All
measures affecting agricultural trade came
under scrutiny, from the various forms of
trade barriers to domestic price and income
support and export subsidies.
Clearer rules for regulations on food safety
and animal and plant health (sanitary and
phytosanitary) were needed in order to
discipline the measures. Regulations for
protecting consumers, livestock and crops
had to be genuine and not an excuse to
be protectionist, to bypass agreements on
opening markets.
Balance is the key to rule-making deals
in the WTO. The balance that emerged
from the Uruguay Round in the Agriculture
Agreement is between agricultural trade
liberalization and governments’ rights to
pursue legitimate policy goals in the sector.
Those goals include “non-trade concerns”
such as food security, rural development
and environmental protection. The two
agreements on Agriculture and Sanitary and
Phytosanitary Measures were negotiated in
parallel.
Agriculture 9

Introduction to
the Agriculture
Agreement
The 1986–94 Uruguay Round negotiations
produced the first comprehensive set
of multilateral trade rules specifically on
agriculture. There are four main components:
(1) the WTO’s Agreement on Agriculture
(sometimes abbreviated as AoA)
(2) the “schedules” or lists of commitments
WTO members have made to set new
limits on tariffs and other aspects
of market access, and on domestic
support and export subsidies (they
are called “schedules” because they
include timetables for moving to the
new tariff and subsidy limits)
(3) the Sanitary and Phytosanitary (SPS)
Measures Agreement
(4) the Ministerial Decision on Measures
Concerning the Possible Negative
Effects of the Reform Programme
on Least-Developed and Net Food-
Importing Developing Countries.
“Agriculture” does not mean the same
in all these documents. In particular, the
Agriculture Agreement does not include
fisheries and forestry products. The SPS
Agreement does.
The Uruguay Round deal provided a
framework for the long-term reform of
agricultural trade and domestic policies.
The Agriculture Agreement reflects the
compromises made to satisfy the many
interests represented in the negotiations.
Over 120 countries participated, including
10 WTO Agreements Series
developed, developing and least developed
countries, and net importers and exporters.
The Agreement establishes a number of
general rules and commitments, mainly
in three areas sometimes called the
“three pillars”. These are: market
access, domestic support and export
competition (which covers export subsidies
and export-related measures with equivalent
effect). The Agreement came into effect in
1995 along with the WTO. Its 21 articles are
divided into 13 parts. It has five annexes.
The 1995 Agreement is described in detail
below. Briefly, it starts by defining the
agricultural products that it covers. It deals
with legally binding commitments on market
access such as reduced import duties and
related issues, domestic subsidies such
as price and income support that have an
impact on trade, and export subsidies.
The Agreement does allow governments to
support their rural economies. This should
preferably be through policies that do not
distort trade, or do so minimally. It also allows
some flexibility for developing and least
developed countries in the way they and other
countries implement their commitments.
The cuts that developing countries made
on their subsidies or tariffs as a result of
the Uruguay Round were smaller than for
developed countries, and they were given
extra time to do it. Least developed countries
were not required to make any reductions.
Special provisions deal with the interests
of poorer countries that rely on imports for
their food supplies, and the concerns of least
developed economies.
In this way, the Uruguay Round deal kicked
off a reform programme in agriculture. The
Agreement’s preamble recognizes that
the reform has the long-term objective of
establishing a fair and market-oriented
 Figure 2: The Agriculture Agreement in a nutshell

Agriculture Agreement

Market access Domestic Export Other rules

support “competition”

Special Tariff “Green Box” Export subsidy cuts Net-food-

Tariffs COMMITMENTS
safeguard quotas importing
developing,
“Blue Box”
Anti-circumvention least
developed
Cuts + other
COMMITMENTS “Development
Box” Food aid

Export
“Amber Box” Export credit restrictions

“De minimis” “Amber”/AMS cuts

limit rules COMMITMENTS

agricultural trading system. The Agreement
committed WTO members to continue the
reform by resuming negotiations in 2000. It
also takes into account non-trade concerns,
including food security, and environmental
protection. Developing countries enjoy
treatment (such as more lenient and
flexible terms, officially known as “special
and differential treatment”). This includes
a pledge to improve opportunities for their
exports to gain access to other markets,
under improved terms.
Cuts in richer countries’ subsidies means their
exports are no longer artificially cheap, and
therefore food supplies can be more expensive
for importing countries. The Uruguay Round
included a separate ministerial decision to deal
with the concerns of two groups of countries
that relied on cheaper, subsidized food from
industrial countries: least developed countries
as a whole, and other developing countries
that are net food importers. This “Decision on
Measures Concerning the Possible Negative
Effects of the Reform Programme on Least
Developed (LDCs) and Net-Food-Importing
Developing Countries (NFIDCs)” recognizes
that these two groups of countries might need
help temporarily to adjust to higher priced
imports resulting from the reforms.
Backing up this set of rules are the
commitments member governments have
made to limit tariffs and provide access to
their markets in other ways, and to reduce
domestic support and export subsidies.
These pledges are listed in legally binding
documents known as “schedules” (because
they include timetables for reaching the
commitment levels). They are an integral
part of the updated General Agreement
on Tariffs and Trade (GATT).1 The other

1 Lawyers distinguish between two versions of GATT: (1) the original pre-Uruguay Round version, now
called GATT 1947; and (2) GATT 1994, the original GATT 1947 updated by the Uruguay Round. For simplicity,
this introduction simply uses GATT. References to provisions applying after 1994 (including in the Agriculture
Agreement) can be assumed to be GATT 1994.

Agriculture 11
 WTO  agreements complement the
Agriculture Agreement — governments
have to observe them as well, when devising
agricultural trade policies.
Relationship with other
WTO agreements
In principle, all WTO rules on trade in goods
apply to agriculture. These rules are in the
agreements themselves and various legal
documents known as “understandings”.
They include the General Agreement on
Tariffs and Trade, and pacts such as those
dealing with sanitary and phytosanitary
measures, customs valuation (how customs
authorities value goods in order to calculate
import duties), import licensing, pre-shipment
inspection (when governments require imports
to have been inspected for price, quantity and
quality before they were exported), safeguard
measures (temporary increases in tariffs
to deal with import surges or price falls),
subsidies in general, and various standards,
regulations and labelling requirements that
imports have to meet (known as “technical
barriers to trade”). The WTO agreements on
services (the General Agreement on Trade
in Services or GATS) and on “trade-related
aspects of intellectual property rights” (TRIPS)
also apply to agriculture.
The relationship is spelt out legally in the
Agriculture Agreement’s Article  21. This
says that the GATT  and all other WTO
agreements on trade in goods (officially
Annex 1A of the Marrakesh Agreement
establishing the WTO) apply but if there is
a conflict, then the rules in the Agriculture
Agreement prevail (Article 21.1).
12 WTO Agreements Series
Products covered by
the Agreement
The products covered are specific to
the Agriculture Agreement. Included are
commodities and other farm produce, and
processed products such as confectionery,
alcoholic and non-alcoholic drinks and
tobacco products. Excluded are fish, fishery
products, forestry products, and those
manufactured from fibres such as cloth and
clothing.
The legal provision defining the coverage is
Annex 1 of the Agriculture Agreement, with
a reference in the Agreement’s Article  2.
This definition of agricultural products is
based on the product categories set up
under the World Customs Organization,
specifically the 1992 version of the WCO’s
“Harmonised System” (HS92). Annex 1
defines the agricultural products covered by
the Agreement as those within Chapters 1 to
24 of the Harmonized System (excluding fish
and fish products), including, for example:
• basic agricultural products such as wheat,
milk and live animals, and products
derived from them, such as, bread, butter
and meat
• processed agricultural products, for
example chocolate and sausages
• wines, spirits, and tobacco products
• fibres, such as, cotton, wool and silk
• raw animal skins for leather production
Rules and commitments
The Agriculture Agreement then spells out
a number of general rules for governments’
actions affecting agricultural trade. This works
in three main areas: market access (measures
applying to imports), domestic support
granted to farmers and export “competition”
(a term used for export subsidies and export-
related policies having similar effect).
Many of these rules translate into
commitments that each country makes to
improve market access and reduce subsidies
that distort trade by affecting prices or
production. The commitments vary: they
are specific to each country, which is why
they are known as “specific” commitments.
Officially they are called individual countries’
“schedules of commitments”, documents
listing the new commitments and when the
new limits will be met (plus some exceptions).
They are legally binding and are an integral
part of the umbrella treaty covering all trade
in goods, the General Agreement on Tariffs
and Trade (GATT).
Time to implement commitments
Reforms cannot be introduced overnight.
Once the Uruguay Round deal was struck,
negotiators gave their countries a period
to phase in the commitments they had
pledged. This was designed so that each
could adjust more easily to the tariff and
subsidy reductions it had made. The agreed
“implementation period” for developed
countries to phase-in their commitments
was six years from 1995. Developing
countries, whose cuts were in any case
more modest, were also given more time:
10 years. Governments could choose the
type of year used to implement these cuts:
12-month periods based on the calendar,
or the marketing or crop seasons, or the
government’s own fiscal year.
For this reason, the exact implementation
period could even vary within a country:
the year that one country used for tariff
reductions might not be the same as the one
it used to cut export subsidies, for example.
(Even though the phase-in period is now long
completed for the original WTO members,
that difference still remains in the annual
notifications that they continue to submit on
how they are living up to their pledges.)
Schedules: the commitments
and phase-in timetable
The commitments on agriculture come from
the 1986–94 Uruguay Round talks, or from
newer members’ negotiations to join the
WTO.
The goods schedules cover commitments
on all products, including non-agricultural
goods, with a timetable for phasing in
reductions. Those on agriculture are listed in
two of the four parts, I and IV:
• the legally bound maximum tariff rates
(“bound tariffs”) for each product,
phased in from the start to the end of
the implementation period (six years for
developed countries, ten for developing)
are in Part I, Section IA
• tariff quota commitments (minimum quota
sizes and the lower tariff rates within the
quotas) are set out in Part I, Section IB
• domestic support commitments are in
Part IV, Section I
• export subsidy commitments are in Part
IV, Sections II and III.
Almost every WTO member has a
schedule of commitments. Exceptions
include EU members who have a single
combined schedule, as do Switzerland
and Liechtenstein. The schedule is legally
binding because it is part of the WTO
Agriculture 13
 agreements. For original members, the
schedules are annexed to an agreement
called “the Marrakesh Protocol to the
General Agreement on Tariffs and Trade
1994”. For newer members, the schedules
are annexed to their “Protocol of Accession”.
Peace Clause
In WTO agreements, “peace clauses” are
usually provisions that shield members from
legal action under other agreements or the
dispute settlement system. This is also known
as “due restraint”. The Agriculture Agreement
includes one, a temporary peace clause that
has now expired. This is the “due restraint”
of Article 13. Agricultural subsidies allowed
under the Agriculture Agreement were
shielded from legal challenge (or other action)
for nine years under specific provisions of the
umbrella General Agreement on Tariffs and
Trade or the more specific Subsidies and
Countervailing Measures Agreement. This
peace clause expired at the end of  2003.
Therefore, the Subsidies Agreement now
applies to agricultural subsidies (subject
to the Agriculture Agreement’s Article  21
which deals with the relationship between
the Agriculture Agreement and other WTO
agreements).
Key principles:
the three pillars
Market access
The conceptual framework
The Uruguay Round and the Agriculture
Agreement introduced an important change
14 WTO Agreements Series
into agricultural markets. Previously trade
flows had been impeded by a myriad of
regulations and restrictions other than
tariffs — so-called non-tariff measures.
Some, such as standards for food safety,
animal and plant health and other purposes,
are now disciplined by the agreements on
Sanitary and Phytosanitary Measures and
Technical Barriers to Trade. The Agriculture
Agreement itself tackles other non-tariff
barriers (discussed in more detail in another
section, below), in particular one group:
restrictions on the quantities that could be
imported either through various forms of
quotas, or outright import bans — known as
“quantitative restrictions”. They have been
replaced by protection that is only in the form
of tariffs. And in addition, the tariffs have to
be within legally-bound limits.
The change stimulated agricultural
investment, production and trade in several
ways. First, with the shift primarily to
tariffs, access to markets became more
transparent, predictable and competitive.
Second, the change strengthened links
between national and international
agricultural markets and this helped
redistribute scarce resources to activities
where they were most productive.
The Uruguay Round did not invent tariff-only
protection for individual agricultural products
but it strengthened it considerably. Countries
already had tariffs on many products and
in many cases countries also promised to
keep the tariffs within legally-bound ceilings
known as “bindings”. Before the Uruguay
Round, 35% of agricultural products (defined
at a detailed level known as “tariff lines”) had
these ceilings. The negotiations made this
more consistent and comprehensive — all
countries now legally bound their tariffs on
all agricultural products and specified them
in WTO schedules.
In order to achieve this, countries had to
deal with the many products where access
to markets was restricted by quotas
and import bans. Often the restrictions
protected major temperate zone agricultural
products, but others were also sheltered.
The Uruguay Round negotiations aimed to
end these restrictions. The agreed means
was “tariffication”: replacing the non-tariff
barriers on agricultural products with tariffs
giving an equivalent level of protection.
As a result, in developed countries tariffs
replaced other forms of trade barriers on
around one fifth of all agricultural products.
The share was considerably smaller for
developing countries. The result: the
Agriculture Agreement outlaws all quotas
and import bans on agricultural products,
and — unlike in other sectors — virtually all
agricultural products traded internationally
now have tariff limits that are legally binding
in the WTO.
‘Bound’ tariff limits: concessions
and schedules
Countries open their markets largely by
promising to keep their customs duties within
lower limits. In negotiations, the promise
to open markets — or to keep them open
— is seen as a “concession”, a response to
demands from trading partners. In a sense,
tariff negotiations are about exchanging
concessions.
Once agreed, those commitments are
written into legal documents called tariff
“schedules”, listing not only the agreed
maximum levels on each country’s tariffs by
product, but also the timetable for phasing
in those limits. Each WTO member has a
schedule of tariff commitments covering all
agricultural products. The schedules are an
integral part of the General Agreement on
Tariffs and Trade (GATT), the umbrella treaty
covering trade in all goods, and are therefore
legally binding. The schedules are usually
detailed, listing hundreds or thousands of
products for each country, although in some
cases the agricultural products are defined
more generally. The tariff limits in the
schedules include the results of tariffication
— when restrictions on quantities were
converted to equivalent tariffs. In many
cases, tariffication resulted in duty rates
that were considerably higher than for
industrial products, reflecting the high level
of protection for agricultural goods before
the Uruguay Round and the WTO. Many
developing countries bound their previously
unbound tariffs at “ceiling” levels, which were
considerably higher than the rates they were
actually applying before the WTO era.
Developed countries agreed to reduce
their tariffs by an average of 36% on all
agricultural products, so long as no product
had a cut of less than 15%. This would be
completed in six years from 1995.
For developing countries, the average
cut was 24%, subject to a 10% minimum,
phased in over 10 years. Many developing
countries, with bound “ceiling” rates, did not
have to cut those rates. Least developed
countries had to bind all agricultural tariffs,
but did not have to reduce any of them.
Access opportunities and tariff
quota commitments
Tariffication still resulted in high tariffs,
some of them prohibitive. So as part of the
package, WTO members agreed to keep
their markets open for tariffied products at
the same level as in 1986–88, the first three
years of the Uruguay Round negotiations
— they agreed to maintain “import access
opportunities” at levels corresponding to
those existing in that base period.
Agriculture 15
 But there might have been little or no market
access for a product in 1986–88. So if
this had been less than 5%  of domestic
consumption, the market opening had to
be topped up and made available to all
supplying countries equally (“on a most-
favoured-nation basis”) so that eventually it
reached 5% of domestic consumption. More
specifically, WTO members agreed that in
these cases, the combined effect should
be a market access opportunity of at least
3% of 1986–88 consumption in 1995, the
first year of the Agriculture Agreement and
the WTO, rising gradually to 5% by 2000
for developed countries, and by 2004 for
developing countries.
How is a “market access opportunity”
provided? The most common form is a tariff
quota (sometimes called a tariff-rate quota,
TRQ), where quantities inside the quota are
charged a lower duty or no duty at all. For
these market access opportunities, the duty
inside the quota had to be low or minimal
either in absolute terms or in relation to the
“normal” ordinary customs duty charged on
out-of-quota imports. As with tariffs, these
tariff quotas are legally bound. The size of
the quota, the tariff rates inside and outside
the quota, and any other conditions, are
listed in the schedules of those members
who use them.
Most tariff quotas in agriculture come
from the Uruguay Round negotiations. A
number also resulted from new members’
negotiations to join the WTO later.
Altogether, at the time of writing (May
2015), 37 WTO members (counting the
EU and its 28 member states as one) had
tariff quotas specified in their schedules.
There are more than 1, 000 tariff quotas
on individual products across the WTO’s
membership. These tariff quotas are binding
commitments. However members are
allowed autonomous tariff quotas at any
16 WTO Agreements Series
time, for example to stabilize the domestic
price after a poor harvest.
Non-tariff border measures
prohibited
Article 4.2 of the Agriculture Agreement
prohibits a range of non-tariff measures that
were previously used on agricultural goods
when they crossed borders as imports or
exports. These include:
• quantitative import restrictions (quotas
and import bans)
• variable import levies (where duties were
raised or lowered according to world
market prices, so that import prices
matched domestic prices supported by
the government)
• minimum import prices (also protecting
domestic producers)
• discretionary government powers when
issuing import licences
• voluntary export restraint agreements
(often agreed by exporters under pressure
from importers)
• non-tariff measures maintained through
state-trading enterprises (such as
requiring some or all imports to be
handled by these enterprises).
Only “ordinary customs duties” are now
allowed when agricultural goods cross
borders. This applies to all products covered
by the Agriculture Agreement, whereas for
other goods, including fisheries and forestry
products, non-tariff import restrictions can
still be used under Article XI:2(c) of the
umbrella General Agreement on Tariffs and
Trade.
Article 4.2 of the Agreement on Agriculture
does not outlaw all forms of non-tariff
import restrictions. Measures available to
governments — provided the measures are
consistent with the GATT or other WTO
agreements applying generally to all goods
— include:
• import restrictions to reduce balance-of-
payments problems (Articles XII and XVIII
of the GATT)
• general safeguards (Article XIX of the
GATT and the Safeguards Agreement)
• general exceptions (Article XX of
the GATT, which deals with a range
of concerns such as public morals,
conservation of resources, and human,
animal and plant life and health)
• the Sanitary and Phytosanitary Measures,
covered by the SPS Agreement, which
deals with food safety and animal and
plant health
• the Technical Barriers to Trade, such as
product standards, technical regulations
and labelling covered by the TBT
Agreement
• other measures covered by general
WTO provisions that are not specific to
agriculture.
Special treatment
As an exception, a small number of WTO
members were allowed to continue with the
restrictions that are normally prohibited on
a handful of products. They had to meet the
strict conditions of Annex 5 of the Agriculture
Agreement. One required them to provide
access to their markets for those products
through import quotas that gradually expanded.
Four countries were allowed this “special
treatment” as a result of the Uruguay Round:
Japan, Republic of Korea and the Philippines
for rice, and Israel for cheese and sheep
meat. Chinese Taipei, which completed its
membership negotiation in 2001, was also
allowed special treatment for rice. By May
2015, four of the five had ceased to apply
these restrictions, and are now limited to
tariffs only. Japan, Chinese Taipei, Israel
and Republic of Korea have converted the
restrictions to equivalent tariffs (they have
“tariffied”) and started to apply ordinary
customs duties on the relevant products. The
Philippines has been allowed to postpone
the transition to ordinary customs duty for
rice until June 2017.
The special safeguard
When countries converted their restrictions
to tariffs, their producers faced increased
competition from imports. Uruguay Round
negotiators agreed that some temporary
protection was needed for extreme cases. So,
as a third element of the tariffication package,
members have the right to raise import duties
temporarily on tariffied products in order
to deal with import surges or a fall in world
prices. This is known as the special safeguard
(SSG) provision of the Agriculture Agreement
(Article  5). It can only be used if the right is
reserved. “SSG” has to appear beside the
products concerned in the member’s list of
commitments (its “schedule”). Thirty-three
members — both developed and developing
— have reserved this right (counting the EU
as a single member), for a limited number of
products in each case.
The special safeguards provisions for
agriculture differ from normal safeguards
under the separate Safeguards Agreement.
For agriculture, the government does
not have to show that the import surge
Agriculture 17
 or price fall is causing serious injury to
domestic producers. The duty increases
can be triggered automatically when
import volumes rise above a certain level
(the volume trigger), or if prices fall below
a specified reference price shipment
by shipment (the price trigger). When
the special safeguard is triggered by an
increase in volume, the higher duty applies
until the end of the year. If it is triggered by
a price fall, any additional duty can only be
imposed on the particular shipment. The
additional duty cannot be applied to imports
within a tariff quota.
From 1995 to 2015 the special safeguard
has been used at least once by only one third
of the members that had claimed the right —
11 of the 33 — triggered either by volume or
price changes.
Market access in the post-
Uruguay Round negotiations
New negotiations on agriculture began
in March 2000, under the Agriculture
Agreement’s Article 20 (“Continuation of the
Reform Process”). When the Doha Round
was launched in 2001, the agriculture talks
became part of the round. Members agreed
that for market access in agriculture, the talks
should aim for substantial improvements.
In the early phase of negotiations five key
points emerged:
• the type of formula for reducing tariffs that
would lead to “substantial improvements
in market access”
• how products that countries consider to
be politically sensitive might be treated
(all countries have these)
• how developing countries might be given
additional flexibility for their “special
18 WTO Agreements Series
products” and be able to raise tariffs
temporarily under “special safeguards” for
dealing with import surges or price falls
• how to deal with conflicting interests
between developing countries that
have preferential access to developed
countries’ markets and those that do not
• how to provide market access for tropical
products and crops grown as alternatives
to illicit narcotics — also an issue
concerning developing countries.
By 2008, members had developed a
comprehensive draft text on these and
other issues in agricultural market access
but did not reach agreement despite their
intensive efforts. The text is known as the
“draft modalities” (sometimes called “Rev.4”
because it is the fourth revision of document:
TN/AG/W/4/Rev.4).
At the 2011 Ministerial Conference in
Geneva, members recognized that they
needed to try something different, to
focus on issues in the Doha Round where
progress might be possible. This included
the possibility of agreement — provisional
or final — on selected subjects ahead of a
possible final deal on the entire set of Doha
issues.
The next Ministerial Conference, in
Bali in 2013, saw agreement on one
component of the market access pillar —
an “understanding” on the administration of
tariff(-rate) quotas (“TRQ administration”).
The issue arose because some countries
felt that the methods used to allocate shares
of the tariff quotas among importers could
impede imports, leaving the quotas under-
filled. The solution is to monitor chronic
underfill. If a quota is persistently under-
filled, then members will try to resolve
this by sharing information and consulting
each other in the Agriculture Committee.
If that fails, the importing government has
to change the method it uses to administer
the quota. Developed countries have to
allow imports in, first-come first-served, at
the importing ports until the quota limit is
reached, or issue import licences upon every
request (“automatic licence on demand”)
up to the quota limit. Developing countries
can choose any alternative administration
method, including continuing with the one
they are already using. The understanding
will be reviewed in 2019: the paragraph
dealing with the change of administration
method — including the flexibility for
developing countries — will lapse in 2019
unless members agree to extend or modify it.
Even then, countries on an opt-out list would
not need to apply it. They are: Barbados,
Dominican Republic, El Salvador, Guatemala
and the United States.
Domestic support
The conceptual framework
• The agricultural package of the Uruguay
Round fundamentally changed the rules
on the domestic support that governments
provide for agriculture. As with many
WTO deals, it strikes a balance between
different objectives. One is to discipline
and reduce domestic support, particularly
when trade is “distorted” — when prices
are raised or lowered artificially or
production is stimulated. The other is
to leave governments with ample scope
to cater for the diverse circumstances
in their agricultural sectors. The agreed
approach also aims to ensure that the
countries’ commitments on market access
and export subsidies are not undermined
by the way they support agriculture
domestically.
• Under the Agriculture Agreement, all
domestic support that benefits farmers is
subject to rules. Conceptually, there are
two basic categories of domestic support,
based on whether trade is “distorted” —
when prices and supply or production differ
from their normal market levels — or not:
• support that does not distort trade,
or does so minimally. This has been
nicknamed “Green Box” support because
it is allowed without any limit. It includes
measures such as government-funded
agricultural research or training)
• trade-distorting support such as a
government buying-in at a guaranteed
price. Most of this is called “Amber
Box” support because it is constrained
(“amber”, or yellow, comes from the “slow
down” colour on traffic lights). Variants are
described in the sections below.
In addition, all WTO members have included
pledges to reduce or limit Amber Box
support, expressed in money values, in their
lists of commitments (their “schedules”) —
with some exceptions.
The Green Box
“Green Box” support is allowed without
any limit (which also means there are no
“reduction commitments” — again, the colour
is taken from “go” on traffic lights). It covers
two broad categories: Government service
programmes and direct payments. The criteria
— general or for specific types of measures —
are in Annex 2 of the Agriculture Agreement.
Generally, the measures must not distort trade
or production, or at most do so minimally. They
must be provided through publicly-funded
government programmes (including when a
government foregoes revenue). They must
not involve transfers from consumers, and
Agriculture 19
 they must not have the effect of supporting
prices for producers. In addition, in the case
of developing countries special treatment
is provided in respect of governmental
stockholding programmes for food security
purposes and subsidized food prices for urban
and rural poor. The Green Box is available to
both developed and developing countries.
Government service programmes
Annex 2 of the Agriculture Agreement
groups specific government programmes
under these headings: general services,
public stockholding for food security,
domestic food aid, direct payments to
producers, decoupled income support (i.e.
not linked to current production or prices or
to inputs or other factors of production used),
government funding in income insurance
and income safety-net programmes, relief
from natural disasters, structural adjustment
through producer retirement (producers
withdrawing from production), structural
adjustment through resource retirement
(resources withdrawn from production),
structural adjustment through investment
aid, environmental programmes, and regional
assistance programmes.
Each of these qualifies for the Green Box
provided the general criteria are met (e.g.
not distorting trade, not supporting prices),
along with conditions for each specific type
of measure.
General services are divided further to
include:
• research in general and for environmental
protection or on particular products
• pest and disease control programmes,
in general and for pests and diseases
related to specific products
20 WTO Agreements Series
• agricultural training, extension and
advisory services
• inspection services, including general
inspection services and the inspection
of particular products for health, safety,
grading or standardization
• marketing and promotion services
• infrastructural services, including
electricity, roads and other means of
transport, markets and ports, water
supply, and other.
The Bali Ministerial Decision on General
Services (document WT/MIN(13)/37 of
11 December 2013) expanded the list
of general services by adding several
programmes considered to be particularly
important for developing countries for rural
development, food security and poverty
alleviation. These programmes are related
to land reform and rural livelihood and all are
given a clearer “green light” to continue.
Direct payments and other
support to producers
Also in the Green Box are direct payments to
producers that are not linked to production
decisions: although the farmer receives
money from the government, this does not
influence the type or volume of agricultural
production — it is “decoupled” payment.
The amount paid must not be linked to
production, prices or factors of production
(e.g. land, labour, inputs) in any year after
a fixed base period. That also means the
farmer receiving the payment must not be
required to produce at all. The criteria for
Green Box direct payments depend on the
type, which may include: income insurance
and safety-net programmes; natural disaster
relief; a range of structural adjustment
assistance programmes; and certain
payments under environmental and regional
assistance programmes.
Other exempt measures
Some support outside the Green Box is also
allowed without any limit – in WTO jargon,
it’s exempt from “reduction commitments”
under the Agriculture Agreement (Article 6).
One type is for development in developing
countries. Another involves direct payments
when production is limited. Finally,
conceptually small (de minimis) levels of
support are capped without having to be
reduced.
Developmental measures
The Green Box includes special treatment
for developing countries. In addition,
outside the Green Box, developing
countries can also support agriculture as
part of their development programmes.
These are direct or indirect assistance
designed to encourage agricultural and
rural development, including investment
subsidies generally available to agriculture,
agricultural input subsidies generally
available to low-income or resource-
poor producers, and domestic support to
producers to encourage diversification away
from illicit narcotic crops.
Blue Box
Amber Box support distorts trade by
encouraging over-production. “Blue Box”
measures reduce the impact partly by
limiting production. Payments are allowed
without limit (and exempt from “reduction
commitments”) if they are made on fixed
areas and yield or a fixed number of
livestock. The payments also qualify if they
are made on 85% or less of production in
a defined base period. While the Green
Box covers decoupled payments and the
Amber Box covers payments that have a
direct link to current production, Blue Box
direct payments fall somewhat in between
in terms of their potential to distort trade:
the actual payments do not relate directly
to current production while production is
limited overall.
De minimis
Green Box, Blue Box and the development
support listed above are allowed without
limit. All other domestic agricultural support
has to stay within limits. In most cases, it also
had to be cut under “reduction commitments”
because it involved market price support,
direct production subsidies, input subsidies,
or other similar measures.
However, all countries are allowed a minimal
(“de minimis”) amount of support without
having to reduce it, even if it distorts
trade, provided the support stays within a
percentage of the value production. That
percentage applies to support for each
agricultural product (it is “product-specific”).
If the support is available to all products
(“non-product-specific”) then it also applies
to agriculture as a whole. The percentage
for developed countries is 5% and for
developing countries generally (with few
exceptions) 10%. That means de minimis
payments are limited but the limit can rise
when the value of agricultural production
expands, and fall when the value declines.
Reduction commitments
Twenty-eight members (counting the EU
as one) had trade-distorting Amber Box
Agriculture 21
 domestic support exceeding de minimis
during the base period. Therefore, they
had to make commitments at the end of
the 1986–94 Uruguay Round to reduce
the support. These reduction commitments
are listed in their legal documents
called “schedules”. The commitments
are expressed as a “total aggregate
measurement of support” (“Total AMS”,
see below) which includes all support
for specific products and support that is
provided generally, in one single figure.
Developed countries with Amber Box
support above their 5% de minimis limit had
to reduce the level of Total AMS support in
the base period by 20% over six years. For
developing countries, this was 13% over
ten years. If the countries that negotiated
to join the WTO after the Uruguay Round
are included, 32 members (counting the EU
as one) now have reduction commitments
specified in their schedules or membership
agreements (the “protocols of accession”).
That means that the committed maximums
are legally binding in the WTO, in the same
way that the tariff ceilings in the schedules
are. In any year, the Current Total AMS value
must not exceed the “scheduled” Total AMS
limit (i.e., the committed maximum in the
schedule) as specified for that year.
All other members have no scheduled
reduction commitments. That means their
domestic support other than the Green Box,
Blue Box or development exemptions has to
be within the “product-specific” and “non-
product-specific” de minimis limits.
Aggregate Measurement of
Support
Price support is the most important measure
in the Amber Box. It can be provided either
through administered prices (which could
also involve transfers from consumers
22 WTO Agreements Series
as well as purchases by the government)
or through certain types of government
funding. When calculating Current Total
AMS, price support is generally measured
by first taking the gap between the applied
administered price and a specified fixed
external reference price (normally based
on prices for the first three years of the
Uruguay Round, 1986–88), and then
multiplying it by the quantity of production
eligible to receive the administered price.
When this method cannot be used, the
actual money spent by the government can
be instead.
Annexes 3 and 4 of the Agreement
describe how to calculate the aggregate
measurement of support (and an alternative
called “equivalent measurement of support”,
described below). The calculation is legally
binding through “supporting material”
incorporated into members’ schedules. For
each product, the size of the subsidy implied
by price support is added to other product-
specific subsidies — a fertiliser subsidy for a
specific product such as wheat, for example.
This produces a figure for product-specific
support, which is then checked against the
de minimis threshold for that product. If the
support figure exceeds the de minimis level,
then it is counted as part of Current Total
AMS.
Non-product-specific subsidies are
calculated separately and, as in the product-
specific case, are included in Current
Total  AMS only if they exceed the relevant
de minimis level. The example in Box  1
illustrates the calculation of Current Total
AMS in year Y for a developed country with
a 5% de minimis threshold; Box 2 illustrates
the calculation of Current Total AMS in year
Y for a developing country with a 10% de
minimis threshold.
Box 1: Calculation of Current Total AMS, member X (developed country),
year Y
Wheat:

Intervention price for wheat $255 per tonne

Fixed external reference price (world market price) $110 per tonne

Domestic production of wheat 2,000,000 tonnes

Value of wheat production $510,000,000

Wheat AMS (AMS 1): ($255–$110)* 2,000,000 tonnes = $290,000,000

de minimis level $25,500,000

Barley:

Deficiency payments for barley $3,000,000

Value of barley production $100,000,000

Barley AMS (AMS 2) $3,000,000

de minimis level $5,000,000

Oilseeds:

Deficiency payments for oilseeds $13,000,000

Fertilizer subsidy $1,000,000

Value of oilseeds production $250,000,000

Oilseeds AMS (AMS 3) $14,000,000

de minimis level $12,500,000

Non-product specific support

Generally available interest rate subsidy $ 4,000,000

Value of total agricultural production $860,000,000

Non-product specific AMS (AMS 4) $4,000,000

de minimis level $43,000,000

CURRENT TOTAL AMS (AMS 1 + AMS 3) $304,000,000

Agriculture 23
 Box 2: Calculation of Current Total AMS, member X (developing country with
10% de minimis), year Y
Wheat:

Intervention price for wheat $255 per tonne

Fixed external reference price (world market price) $110 per tonne

Domestic production of wheat 2,000,000 tonnes

Value of wheat production $510,000,000

Wheat AMS (AMS 1): ($255–$110)* 2,000,000 tonnes= $290,000,000

de minimis level $51,000,000

Barley:

Deficiency payments for barley $3,000,000

Value of barley production $100,000,000

Barley AMS (AMS 2) $3,000,000

de minimis level $10,000,000

Oilseeds:

Deficiency payments for oilseeds $13,000,000

Fertilizer subsidy $1,000,000

Value of oilseeds production $250,000,000

Oilseeds AMS (AMS 3) $14,000,000

de minimis level $25,000,000

Non-product specific support

Generally available interest rate subsidy $ 4,000,000

Value of total agricultural production $860,000,000

Non-product specific AMS (AMS 4) $4,000,000

de minimis level $86,000,000

CURRENT TOTAL AMS (AMS 1) $290,000,000

24 WTO Agreements Series

Other Amber Box measures include input
subsidies and various types of direct
payments related to current area or
production.
Equivalent Measurement of
Support
When it is not practical to calculate a product-
specific AMS as set out in the agreement,
provisions are made for an “equivalent
measurement of support” (EMS). The
EMS is generally calculated on the basis
of budgetary outlays — the money spent
by governments to support a product, for
example, rather than market price support
calculated in comparison to a fixed external
reference price. Like the AMS, the EMS is
compared to the de minimis level and, if above
that level, included in the Current Total AMS.
Evolution since 1995
Since the Uruguay Round and its new
disciplines and reduction commitments
there has been a significant fall in the most
trade-distorting support provided by the
members that were traditionally considered
to be the biggest subsidizers. For example,
since 1995, the EU’s Current Total AMS
has decreased by almost 90% (from €50.2
billion to €6.9 billion in 2011-12), by 82%
in Japan (from ¥3,507.5 billion to ¥608.9
billion in 2012), and by 48% in Switzerland
(from CHF4.3 billion to CHF2.2 billion). For
the US, Current Total AMS has also clearly
fallen since 2000, by 60% (from US$16.8
billion to US$6.9 billion in 2012). Much of this
is either due to changes in domestic policies
triggered by the Uruguay Round disciplines,
or in anticipation of new rules expected
to emerge from the post-Uruguay Round
negotiations, or both. High prices have also
played a part in some cases. While Green
Box support has increased significantly in
the same periods, these changes represent
a move away from the most trade-distorting
domestic support.
Domestic support in the post-
Uruguay Round negotiations
Domestic support has been a central part
of the agriculture negotiations that began
in early 2000 under Article 20 of the
Agriculture Agreement, one year before
the launch of the Doha Round and were
incorporated into the Doha Round in 2001.
The 2001 Doha Ministerial Declaration
commits members to comprehensive
negotiations aimed at substantial reductions
in trade-distorting domestic support, among
other objectives.
On 1 August 2004 members agreed
on a framework for achieving this in the
agriculture sections of the decision on
the Doha work programme (Annex A of
document WT/L/579). Since then, the
work has concentrated on developing new
disciplines.
At the 2013 Bali Ministerial Conference,
ministers from the WTO’s membership
adopted two decisions on domestic
support. One was the decision on general
services in the Green Box described above
(document WT/MIN(13)/37 of 11 December
2013). The other was the decision on
Public Stockholding for Food Security
Purposes (document WT/MIN(13)/38 of
11 December 2013). This established an
interim solution — while members continued
to negotiate a permanent one — to shield
public stockholding programmes for food
security in developing countries involving
food purchases at administered prices (as
provided for in the Agreement), so that they
would not be challenged legally under the
Agriculture 25
 Agreement on Agriculture even if a country’s
agreed limits for trade-distorting domestic
support were breached. At the 2015 Nairobi
Ministerial Conference, a ministerial decision
was adopted that encouraged members
to make all concerted efforts to agree
on a permanent solution and to continue
holding negotiations in this regard in an
accelerated time-frame. By adopting the
Nairobi Ministerial Declaration members
also committed themselves to advance
negotiations on the remaining Doha Round
issues, including on domestic support.
Export subsidies
The conceptual framework
Export subsidies increased considerably in
the years leading to the 1986–94 Uruguay
Round. They became one of the key issues
to be tackled in the agricultural negotiations.
Export subsidies for industrial products
were already strictly disciplined under the
General Agreement on Tariffs and Trade,
and for developed countries they had
been outlawed, following previous GATT
negotiations. But for agricultural and other
primary products, the disciplines were loose
in theory and ineffective in practice.
The Agriculture Agreement resulting from
the Uruguay Round says agricultural export
subsidies are outlawed except in specific
circumstances (Articles 3.3 and 8 of the
Agreement):
• when a country has commitments to
reduce its export subsidies on individual
products or groups of products, within
the limits specified in the legally binding
document known as its “schedule”
of commitments: these subsidies are
identified in Article 9.1
26 WTO Agreements Series
• for a limited period of time — while export
subsidies were being reduced (years 2–5
of the implementation period), countries
were allowed to overshoot their annual
limits by a limited amount provided totals
for the whole period were within the
agreed limits (Article 9.2(b))
• for developing countries, during the
implementation period, some export
subsidies, including for some marketing
and transport costs, under the special
treatment provisions in Article 9.4
• Export subsidies not listed in Article  9.1
provided they are not used to get around
(“circumvent”) the commitments either to
cut export subsidies or not to subsidize at
all — a provision designed essentially to
block any possible loophole.
Commitments to cut export
subsidies
What are export subsidies?
Exports are considered to be subsidized
if the support provided depends on the
products being exported, or on meeting
export targets. The Agriculture Agreement
refers to “subsidies contingent on export
performance”. That includes types of support
listed in Article 9.1, covering most types of
export subsidy in agriculture:
• direct export subsidies provided by
governments or their agencies contingent
on export performance
• exported agricultural products released
from non-commercial stocks at prices
lower than on the domestic market
• payments on the exports of agricultural
products financed by virtue of governmental
actions, such as levies on all production
which are then used to subsidise the
exports of part of that production
• subsidies to reduce costs, such as
subsidies for marketing goods exports;
this can include costs of upgrading,
handling and international freight
• when domestic transport charges on
export shipments are provided on terms
more favourable than products that are
sold domestically, such as for bringing
exportable produce to one central point
for shipping
• subsidies on products used to make other
products (“incorporated products”), such as
subsidies on wheat used to make biscuits
on condition that the biscuits are exported.
All these export subsidies had to be
reduced (they are “subject to reduction
commitments”). The committed limits are on
both the subsidized export quantities and the
level of expenditure for such subsidies (the
corresponding “budgetary outlays”).
Product categories
Countries’ export subsidy limits and how
they are reduced are listed among the
commitments that they legally bound in the
WTO (in their “schedules” of commitments).
These limits apply by product or group
of products. Members originally divided
all agricultural goods into 23  products or
product groups, such as wheat, coarse
grains, sugar, beef, butter, cheese and
oilseeds. Some members’ commitments are
on subdivisions of these.
Expression of commitments
Each of the limits on the subsidized quantity
and the level of expenditure for each product
or group of products, is a separate binding
commitment. Each is specified in the member’s
“schedule” of commitments. For “incorporated
products”, the commitments are only on the
level of expenditure (budgetary outlays).
These limits are annual. Countries were
allowed to exceed (“overshoot”) the limits by
a limited amount in years two to five of their
period for implementing the cuts (six years for
developed countries, ten years for developing
other than the least developed). Even when
they did overshoot, the limits for the sixth
and subsequent years’ limits could not be
breached, and the total amounts for the
entire period had to be within the combined
limits. This is known as the “downstream
flexibility” provision of Article 9.2(b).
Rates of cut
The starting point for export subsidy cuts
was the base period of 1986–90. Cuts in the
subsidy limits were made annually in equal
steps from that level, over six years starting
in 1995 for developed countries, and over ten
years for developing countries. For developed
countries, the limits on quantities subsidized
had to fall by 21% and the level of expenditure
(budgetary outlays) by 36% over the six years.
The cuts for developing countries were 14%
for the quantities and 24% for the budgetary
outlays, over their ten years.
By the end of 2015, 16 members (counting
the European Union as one) were allowed
to subsidize agricultural exports because
they had specified this commitment in their
Schedules and made the cuts accordingly.
No other members were (and are) allowed to
subsidize exports.
Agriculture 27
 No reduction commitment?
No subsidy allowed
None of the export subsidies listed in
Article 9.1 is allowed on any agricultural
product unless the member has pledged to
cut the subsidy on that product. This has to
be included in the member’s legally binding
“schedule” of commitments. In other words,
if there is no reduction commitment on a
product, the member cannot subsidize its
export.
Specific flexibilities for
developing countries
Developing countries have additional
rights under special treatment provisions
(“special and differential treatment”). Here,
they are allowed to subsidize exports in
order to reduce marketing and domestic
transport costs during the implementation
period. However, these subsidies must not
be a disguised means of getting around
the limits on export subsidies in general —
they must not be “applied in a manner that
would circumvent reduction commitments”
(Article 9.4).
Anti-circumvention
Having agreed on cuts in export subsidies
(and in many cases an outright ban),
members were concerned that subsidies
could still be hidden in exports or elsewhere.
Therefore, the Agriculture Agreement
includes provisions designed to prevent
countries from finding a way around
(“circumventing”) their commitments.
Article 10 says that if a country uses export
subsidies that are not listed in paragraph 1
of Article 9 of the Agreement, it cannot do so
in a way that gets around its export subsidy
28 WTO Agreements Series
commitments (“to circumvent or threaten to
circumvent”). This includes “non-commercial”
transactions.
The article goes on to say that if a country
claims it is not subsidizing exports beyond
its reduction commitment level, it must show
that it really is not doing so in any form,
whether listed in Article 9 or not.
Negotiators also felt that some government
activities could contain hidden subsidies.
These include export credit, credit
guarantees and insurance programmes.
Article 10 says members will work to develop
internationally-agreed disciplines on these
financial activities.
Food aid is another activity that some
countries believe could circumvent export
subsidies commitments. Article 10 broadly
disciplines the way members should provide
international food aid to avoid this.
The Doha Round agriculture talks include
negotiations on more detailed disciplines for
export finance and international food aid.
Evolution since 1995
Since the Agriculture Agreement (and the
WTO) came into being in 1995, export
subsidies have decreased significantly. This
is reflected in the information that members
have shared with each other through
notifications to the WTO (see Figure 3, which
covers 1995–2013). Members’ subsidies
are now much lower than their committed
limits. This is partly because international
prices have risen since 2000, meaning less
subsidy is needed, and partly because some
members have reformed their agricultural
trade policies.
 Figure 3: Export subsidies have fallen considerably
The evolution of WTO members’ total spending on export subsidies compared with
commitments on limits (1995–2013)

7,000 100%

50.5%
90%
6,000

41.9%
36.1%

32.3% 80%
29.9%

5,000 70%

31.9%
60%

28.6%
4,000

31.8%
27.3% 50%

22.0%
26.1%
3,000 40%

16.4%
2,000 30%

10.2%
20%

6.3%

5.6%
1,000

3.3%
10%

3.0%

2.2%

1.7%
0 0%
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Sum notified budgetary outlays (US$ million) (left axis)
Sum notified budgetary outlays as % of sum budgetary outlay commitments
by notifying members (right axis)
Sum budgetary outlay commitments by notifying members as % of sum
budgetary outlay commitments by all members (right axis)

Source: Members’ notifications to the WTO of their export subsidy budgetary outlays, as
available on 21 March 2015

Export subsidies in the post- In the Doha Round, the export subsidy
Uruguay Round negotiations package has four components:

As with the other pillars, negotiations on the • export subsidies themselves

package of export subsidy issues (export
subsidies and export-related policies with • export credits, export credit guarantees
equivalent effect) began in March 2000 and insurance programmes
under the Agriculture Agreement’s Article
20 and were merged with other subjects • international food aid
when a new, broader round of talks was
launched in Doha, Qatar, in November 2001. • agricultural exporting state trading
Officially the package of export subsidy enterprises.
issues is known as “export competition” (but
not to be confused with the separate subject
of “competition policy”). On 1 August 2004, members agreed on a
framework designed to give some shape

Agriculture 29
 to what could be a final Doha Round deal
on agriculture (Annex A of document
WT/L/579). For agricultural export
subsidies, members agreed to negotiate
in detail the methods (or “modalities”) for
eliminating the subsidies in all forms and
disciplining all other export-related policies
in the package by “a credible … date”. Just
over a year later, members agreed that
the “credible date” for scrapping export
subsidies would be the end of 2013 (Hong
Kong Ministerial Declaration, document WT/
MIN(05)/DEC of 18 December 2005).
Since then, members have worked on a
timetable for eliminating all forms of export
subsidies and detailed disciplines for the
three other components. However, failure to
strike a deal on agriculture as a whole (and
the Doha Round) meant the 2013 deadline
for ending export subsidies was missed.
The Bali ministerial declaration on the export
subsidy package (“export competition”,
document WT/MIN(13)/40 of 7 December
2013), was a strong political statement
rather than a binding decision. Members
reaffirmed that the subject remained a
priority in the agriculture negotiations and
they agreed to “exercise utmost restraint” in
using any form of export subsidy. In order to
support reforms in this area, they created a
new process to improve the way information
is shared and the use of all components of
the package are monitored better.
Elimination of export
subsidies
Finally, members agreed at the Tenth
Ministerial Conference in Nairobi (ministerial
decision on export competition, document
WT/MIN(15)/45 of 19 December 2015) to
eliminate export subsidies, with differentiated
timelines. Developed country members
30 WTO Agreements Series
agreed to eliminate most of their scheduled
entitlements immediately, with delayed
implementation in a limited number of cases.
As a general rule, developing countries will
do so by 2018. Developing country members
will keep the flexibility to cover marketing and
transport costs for agricultural exports until
the end of 2023, and the poorest and food
importing-countries would enjoy additional
time to cut export subsidies. The decision
contains disciplines to ensure that other
export policies are not used as a disguised
form of subsidies. It contains new disciplines
on export credits, export credit guarantees
and insurance programmes, agricultural
exporting state trading enterprises and
international food aid (more below in the
section on negotiations).
Other provisions
Export restrictions
Countries can ban or restrict exports
temporarily in order to prevent or relieve
critical shortages of foodstuffs or other
essential products. This is allowed under
GATT Article XI: 2(a), with additional
disciplines for food in Article 12 of the
Agriculture Agreement.
Fundamentally, the objective is to create
a means for sharing information and
consultation. Countries limiting or banning
food exports (under GATT Article XI:2(a))
have to consider the food security of
importing countries, to notify the WTO
membership (through the Agriculture
Committee) before introducing the restriction,
and be prepared to discuss the restriction
with importing countries — and that includes
providing additional information. Among
developing countries, only those that are net
food-exporters have to follow those steps.
Ultimately, the aim is to make food supplies
more reliable and accessible for importers.
This is the other side of the coin of members’
commitments to open their markets.
As with all notifications, information on food
export restrictions have to be submitted in an
agreed standard form (called Table ER:1, one of
several “notification requirements and formats”
adopted by the Agriculture Committee).
This subject is also part of the Doha Round
agriculture negotiations. The 2004 framework
(document WT/L/579) says the disciplines
will be strengthened. Some specific
negotiating proposals are on the table.
Net food-importers and
others
Making agriculture more oriented towards
the market means world prices should
rise. This makes food imports more
expensive and is a problem particularly
for poorer countries that rely on imports.
So a “Ministerial Decision on Measures
concerning the Possible Negative Effects of
the Reform Programme on Least-Developed
and Net Food-Importing Developing
Countries” (LDCs and NFIDCs) was adopted
in Marrakesh an outcome of the Uruguay
Round negotiations on agriculture.
The decision recognises that all members
should benefit from the opportunities of
trade expansion and economic growth as
the Uruguay Round reforms are gradually
implemented. It also recognizes that some
countries could also suffer. These are all
the least developed countries and those
developing countries that are net food-
importers. They could face difficulties in
finding food to import at affordable prices, or
the finance needed for the purchases.
Ministers agreed to act in a number of ways
to ensure that enough food aid continues
to be available to help developing countries
meet their needs, during the Uruguay Round
agricultural reforms. This includes:
• a review of the level of food aid established
periodically by the Food Aid Convention’s
Food Aid Committee and negotiations
to establish levels of commitments on
food aid that are sufficient to meet the
legitimate needs of developing countries
while the reform is underway
• guidelines to ensure that a higher
proportion of food aid is given in fully
grant form — not as credit or with other
conditions
• more aid for least developed and net-food-
importing developing countries to help
them improve agricultural productivity
and infrastructure — developed countries
would fully consider requests for technical
and financial assistance under their aid
programmes.
To ensure that finance is not a hindrance
to import food, ministers also agreed that
any agreement on agricultural export credit
should favour least developed and net food-
importing developing countries. If the net
food-importers face short-term difficulties
in financing normal quantities of commercial
imports, they should be eligible to draw
on the resources of international financial
institutions under existing programmes, or
any new programmes set up to help them
adjust.
Members monitor how they are living up to
the decision. This is done in the Agriculture
Committee under Article 16.2 of the
Agriculture Agreement. The situation is
also reviewed regularly by the Ministerial
Agriculture 31
 Conference, the WTO’s topmost decision-
making body. Sharing information is one of
a series of steps used to help the decision
to work in practice. Members that are food
aid donors under the decision have to supply
information annually on their donations
and other actions. This is submitted in the
committee’s standard form (called Table
NF:1).
In addition, a WTO list of net food-importing
developing countries has been created
and is updated periodically — they are
not identified in the decision itself. The
procedure for countries to be on the list was
agreed by the Agriculture Committee (in
document G/AG/3). Currently 31 developing
countries are on the list (circulated in the G/
AG/5/ document series). (Least developed
countries are identified by the UN.) The list
is reviewed in the Agriculture Committee’s
March meetings when members can also ask
to be added. Every November, the committee
monitors how the decision is working, using
donors’ notifications and other information.
Developing countries’ specific
treatment and flexibilities
Development and the interests of developing
countries — a majority of WTO members
— are at the heart of the WTO’s work.
Developing countries are allowed a number
of special rights, including to make gentler
cuts, to phase them in over a longer period,
and to use some kinds of subsidies that are
outlawed for developed countries. Least
developed countries have not had to make
any cuts.
The official term for this is “special and
differential treatment” (S&D or SDT). It is
used generally in all WTO topics, not only
agriculture.
32 WTO Agreements Series
In the Agriculture Agreement, the legal
basis for this special treatment is summed
up in Article  15, including the commitments
developing countries make in their
“schedules”, in the Agreement itself, and in an
agreement to look after the interests of poorer
food importers — the Marrakesh Decision
on Measures Concerning the Possible
Negative Effects of the Reform Programme
on Least-Developed and Net Food-Importing
Developing Countries (NFIDCs).
More specifically, special treatment for
developing countries in agriculture includes:
• gentler cuts in trade-distorting
domestic support (the “Total Aggregate
Measurement of Support”), tariffs and
export subsidies — in each, the cuts were
two-thirds of those required for developed
countries; least developed countries did
not have to make any cuts
• a longer period (ten years, 1995-2004,
instead of six) to phase in the cuts
• the right to use certain types of support
without any limit (the “Development Box”)
• a larger de minimis level of permitted trade-
distorting domestic support (generally,
10% of the value of production instead
of 5%)
• the ability to use some export subsidies to
reduce internal transport and marketing
costs for exports — while the cuts are
being implemented, and under certain
conditions
• recognition that the interests of some
poorer food importers need to be looked
after: they are the least developed and
net food-importing developing countries
(LDCs and NFIDCs) — a special decision
deals with this
• exemption from some disciplines on the
export prohibitions and restrictions for
developing countries that are not net-food
exporters of the restricted food.
Transparency:
sharing
information
Reaching agreement in a negotiation is not
the end of the story. Rather, it is the beginning
of what can be a considerable amount of
work, in this case introducing fundamental
reforms in agricultural trade. Countries have to
implement what they have agreed, and other
countries want to see how well that work is
progressing. For this reason, the Agriculture
Agreement created the Agriculture
Committee, comprising all WTO members,
to “… oversee the implementation of the
Agreement on Agriculture.” The committee
monitors how well members are complying
with the rules that resulted from the Uruguay
Round and with their own commitments. In
order to do so, it needs information. Central
to this is information that countries share with
the rest of the membership — often annually
— through “notifications” to the committee, on
how they are complying with the agreed rules
and their legally binding commitments (as
listed in their “schedules”). That information
is then the basis for reviewing how the
agreement is being implemented, although
other information is also used.
Because notifications are central to this
task, the committee also reviews how well
members are complying with their obligations
to notify what they are doing in agriculture.
The Goods Council, the body with oversight
over the whole of trade in goods — similarly
comprising all WTO members — also takes
an interest. If members are not up-to-date
with their notifications, the WTO Secretariat
reminds them annually. The Secretariat also
alerts delegations annually about the regular
notifications they will have to file in the
coming year.
All notifications are submitted to the WTO
through a Central Registry of Notifications.
This unit forwards the notifications to the
Secretariat’s division handling the subject, in
this case the Agriculture and Commodities
Division. Meanwhile, the Agriculture
Committee has developed standard forms
and timelines (document G/AG/2) to help
members comply with their obligations
to notify. In agriculture these are tables.
Notifications are increasingly handled
electronically. Comprehensive information is
publicly available on-line in the Agriculture
Information Management System (AG-IMS:
http://agims.wto.org/) where notifications
and relevant data can be accessed in the
three official WTO languages (English,
French and Spanish).
In agriculture, members are required to
submit 12 types of notifications under five
topics. Each type is identified by initials
representing the topic: MA for “market
access” and so on. They are:
• Market access — Tables MA:1 to MA:5
–– tariff and other quotas
–– special safeguard actions
• Domestic support — Tables DS:1 to DS:2
–– Current Total Aggregate Measurement
of Support (AMS)
–– new or modified domestic support
measures for which an exemption from
reduction commitments is claimed
• Export subsidies and anti-circumvention
of export subsidy rules (Tables ES:1 to
ES:3)
Agriculture 33
 • Export prohibitions or restrictions (Table Negative Effects of the Reform
ER:1) Programme on Least-Developed and Net
• Implementation of the Decision on Food-Importing Developing Countries
Measures Concerning the Possible (NFIDCs) (Table NF:1)

Figure 4: Types of notifications at a glance

MA DS ES

Market Domestic Export

access support subsidies

Tables MA:1–MA:2 Tables DS:1 (domestic Tables ES:1 (export

(tariff quotas), support), subsidies),
MA:3–MA:5 (special DS:2 (new/changed ES:2 (total exports),
safeguards) exempt measures) ES:3 (food aid)

ER NF
Export Follow-up to
prohibition and the NFIDC
restrictions decision

Table ER:1 Table NF:1

(NFIDC = Net food-importing developing countries)

The notifications that each member has to
submit largely depends on the commitments
it made. Many members only have to submit
a limited number. All have to submit two:
Tables DS:1 on domestic support and ES:1
on export subsidies, even when they have
not subsidized. Some notifications have to
be submitted periodically, often every year.
This depends on the frequency and the
deadlines set by the committee. Some are
only submitted when a specific measure is
introduced, or is about to be introduced, for
example on export restrictions.
By the first quarter of 2015, more than
3,500 agriculture notifications had been
submitted to the WTO for review (see Figure
5). These notifications provide information
on the agricultural policies implemented by
WTO members and are publicly available
via a database known as the Agriculture
Information Management System (http://
agims.wto.org/), in the three official WTO
languages (English, French and Spanish).

34 WTO Agreements Series

 Figure 5: Agriculture notifications submitted to the WTO since its creation in
1995

300

250

200

150

100

50

2015*
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
* up to 10 April 2015.

Details of what has to
be reported
Market access notifications
The legally binding commitments on market
access that members have made are listed in
the legal documents known as “schedules”.
The commitments cover tariffs, tariff quotas
and special safeguards. Members do not
have to notify their legally binding tariff
ceilings to the Agriculture Committee — the
information is already in the “schedules”.
However, they have to inform other WTO
bodies about the tariffs that they actually
charge (the “applied tariffs”, which can be
lower than the binding ceilings) including
the Market Access Committee, and for their
periodic Trade Policy Reviews.
If they have tariff quotas and the right to
use the special safeguard, then they have
to report how they have used these, in some
cases annually, in others when a measure is
used. When members began implementing
the reform (1995 in most cases), they had
to describe upfront how each tariff quota
would be administered, for example whether
imports would be allowed in “first-come,
first-served” or if import licences were to
be used, or some other method. For import
licences, members had to say who would
be eligible and how the licences would be
shared out. If the government changes the
method, that has to be notified each time (ad
hoc). After the end of each year, the member
has to notify the quantity actually imported
under each tariff quota (known as “tariff-
quota fill”).
If a member can use the special safeguard
(temporary tariff protection in response
to a trigger: an import surge or a price fall),
it must notify the levels used to trigger the
safeguard. This allows its trading partners to

Agriculture 35
 know quickly how the special safeguard is
being used, such as the size of the volume
increase or price fall that will trigger the
temporary tariff rise. If the safeguard is to be
triggered by a price fall, the country has to
report the reference prices (average import
prices during 1986-1988) that will trigger the
safeguard. At the end of the year, an annual
summary of the country’s use (or non-use) of
the special safeguard has to be notified.
Domestic support notifications
Every year, all members must report to the
Agriculture Committee how much domestic
support they have given to the sector.
They have to report all measures under
the categories that have no limits — the
Green Box, developmental measures and
direct payments under production limiting
programmes (the Blue Box).
Trade-distorting Amber Box support (for
example, price guarantees or income support
when linked to production) also has to be
reported annually. Here, the requirements
distinguish between two categories of
members:
• Those with Total AMS commitments
(maximum Amber Box support allowed
per year) in the schedule. These members
can provide support beyond de minimis
levels but within their committed limits.
They have to calculate every year the total
distorting support they have provided in
that year (called “Current Total AMS”) and
demonstrate that this is within the limit.
Support within de minimis is not included
in this calculation.
• Those without commitments. These
countries cannot exceed the de minimis
limit. The information they have to notify
annually is to show that any support
36 WTO Agreements Series
provided is within the country’s de minimis
limit.
Least developed countries are allowed to
submit their domestic support notifications
every two years. Developing countries can
also ask the committee to allow them to skip
the annual notifications except for the Green
Box, developmental or Blue Box support.
Some other notifications have to be
submitted when policies change: when
a member modifies existing support in
the unlimited Green Box, Blue Box or
developmental categories, or introduces new
programmes. The committee also examines
these regularly.
Export subsidy notifications
Export subsidies have to be notified annually.
The vast majority of members have no
reduction commitments, meaning they
cannot subsidize exports. They only have
to report that they have not used export
subsidies on agricultural products — except
that developing countries allowed to use
marketing and transport subsidies during the
implementation period (under Article 9.4) do
have to list these.
Members with legally binding commitments
to reduce the subsidies, as listed in their
“schedules” have to report every year: both
the quantities subsidized and the level
of expenditure (the “budgetary outlays”).
Additional notifications have to be made
every year to help the committee monitor
whether countries are finding ways around
their agreed limits (“anti-circumvention”).
One is on any international food aid a country
may have given. Another is the total volume
of exports of agricultural products, which
has to be notified by those countries that
are allowed to subsidize (because they have
reduction commitments), and by a number of
other “significant exporters” as defined by
the committee.
Export restrictions notifications
The Agriculture Agreement says members
introducing export restrictions on food
have to consider the effects on importing
countries’ food security. Most members
must notify the Agriculture Committee
before restricting food exports and must be
prepared to consult other members that are
affected. Developing countries that are not
net exporters of the restricted product are
exempt.
Notifications for net food
importers and others
As explained above, when the Uruguay
Round ended in 1994, members agreed to
try to avoid problems for poorer countries
if imported food became more expensive
as a result of the reform. The Agriculture
Committee monitors how the Ministerial
Decision on Measures Concerning the
Possible Negative Effects of the Reform
Programme on Least-Developed and Net
Food-Importing Developing Countries
(“the NFIDC decision”) is implemented.
The Ministerial Conference also reviews it
regularly. If members provide food aid or
technical and financial assistance to least
developed or net food-importing developing
countries, they must notify details annually.
Any other information relevant to the
decision must also be reported.
Agriculture
Committee
The “Committee on Agriculture” (often
abbreviated as CoA) was set up under the
Agriculture Agreement’s Article 17. As with
almost all WTO bodies, it comprises all WTO
members. Its observers include countries
negotiating to join the WTO and some
international government organizations
active in agriculture. The committee’s
mandate comes from a General Council
decision (document WT/L/43):
“The Committee shall oversee
the implementation of the
Agreement on Agriculture. The
Committee shall afford members
the opportunity of consulting
on any matter relating to the
implementation of the provisions of
the Agreement.”
Specifically, the committee does the
following:
(1) overseeing and monitoring the
implementation of the Agriculture
Agreement and members’
commitments; delegations can ask
questions about how other members
are implementing the Agreement
(2) providing a forum for members to
consult each other on agricultural
trade issues and on issues related
to implementing their commitments,
including those based on rules
(3) in the committee, members use notified
information to review the Agreement’s
implementation. This is normally
through questions and answers. They
can (and do) also ask each other
Agriculture 37
 questions or volunteer information
that is not based on notifications
(allowed under Article 18.6). Even if a
member queries another’s practices in
the committee, it can still seek legal
dispute settlement at any time  Management System database (http://
(4) monitoring developments in
agricultural trade and implementation
of various decisions, including
the 1994 Decision on Measures
Concerning the Possible Negative
Effects of the Reform Programme
on Least-Developed and Net Food-
Importing Developing Countries, the
2013 Decision on TRQ Administration
and the 2015 Decision on Export
Competition.
The committee usually meets three or
four times a year. Special meetings can be
convened if necessary. Its work is officially
recorded in the Secretariat’s summary
reports and in its annual reports to the
Goods Council, both publicly available. The
committee’s chair is usually a delegate from
one of the members.
Negotiations are handled separately,
officially in “Special Sessions” of the
committee, with a separate chairperson.
As mentioned above, after the conclusion
of the Uruguay Round the talks began in
2000 under the Agriculture Agreement’s
Article 20 (“Continuation of the Reform
Process”).
The reviews
The questions members ask each other
as they review notifications are part of the
committee’s key responsibility of overseeing
how countries are complying with their
commitments. Delegations can also raise
any concerns about developments in other
38 WTO Agreements Series
members’ agricultural policies under Article
18.6 of the Agriculture Agreement.
All these questions and their answers can
be found in the Agriculture Information
agims.wto.org/, see below).
A substantial amount of information has
been supplied over the years through these
questions and answers. Since the WTO
was created in 1995, members asked each
other a total of 5,013 questions (up to
2014). Figure 6 shows that 12% of these
were not about actual notifications (Article
18.6 questions), 87% were about notified
information and the remaining 1% were
about overdue notifications and other issues.
Figure 6: Notifications dominate
the questions
The distribution of questions by type
and by subject (1995–2014): 51% of
questions about notifications were on
domestic support
Other (1%)
Art.18.6
(12%)
Individual notifications (87%)
Source: AG-IMS
Among the 87% of questions about specific
notifications, the majority were about
domestic support: 51% of these (or 44% of
 Figure 7: Domestic support attracts
most questions
Distribution of questions by pillar
(1995–2014)
Export
competition
(573) 12%
Market access
(1,703)
34%
Domestic support
(2,693)
54%
Source: AG-IMS
all questions) were about DS:1 notifications
(Amber Box, de minimis, Blue Box, Green
Box and developmental support). The two
next largest numbers of questions were both
about tariff quotas: Table MA:2 on imports
under tariff quotas showing whether the
quotas were filled (16%), and Table MA:1
on administration — how the quotas were
allocated among importers — (12%).
At the heart of the reform under the
Agriculture Agreement are the three pillars
of market access, domestic support and
export subsidies. Unsurprisingly, most
questions are about these. Figure 7 shows
that among the three pillars, more than
half were about domestic support (54%),
34% were on market access and 12% on
export subsidies and related issues (“export
competition”).
On market access, members are most
interested in tariff quotas that have low
import volumes compared to the size of the
quotas (low “fill rates”), and the methods
that governments use to allocate shares of
the quotas among importers. The largest
number of questions on domestic support
are about Green Box programmes (which
can be complicated and detailed) and
Amber Box support (which distorts trade).
A significant number of questions were
about how members classified their support
programmes into the different categories.
On the export competition pillar, a wide
range of questions were asked about export
subsidies under reduction commitments,
particularly about the products covered and
the commitments in members “schedules”.
This has not always been the case. Figure
8 shows that the distribution of questions
by pillar has evolved over time. In earlier
years  (1995–98), more attention was given
to market access than domestic support.
Breaking all questions down according to
type — whether the questions were about
specific notifications or not — shows some
fluctuation but with no particular pattern.
Figure 9 shows this for 1995–2014.
Developed countries are generally more
active in asking questions than developing
countries. Figure 10 tracks how many
questions were asked by developing and
developed countries.
Agriculture 39
 Figure 8: In early years, questions on market access dominated
Evolution of distribution of questions by pillar (1995–2014)

600
500
400
300
200
100
0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Market access Domestic support Export competition

Source: AG-IMS

Figure 9: The proportion of questions by type has fluctuated

Evolution of questions according to whether they are about notifications (1995–2014)
600
500
400
300
200
100
0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014

Art.18.6 Individual notifications

40 WTO Agreements Series

 Figure 10: Developing countries ask far fewer questions
Tracking the shares of questions asked by developing and developed countries 1995–2014

800
700
600
500
400
300
200
100
0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Developing countries Developed countries

Source: AG-IMS
Note: the total numbers of questions here might not be the same as in other charts — here
when more than one country asks the same question, that counts as several questions.

By contrast, the proportion of questions
asked about notifications from developed
and developing countries has been more
equal. In recent years (2010–14, the latest
year available) more questions have been
about developing countries’ notifications
than developed. This trend is a result of
several factors: queries about developed
countries’ programmes were handled in
earlier years, developing countries often
took longer to submit their notifications,
and some of them have expanded their
agricultural programmes. These trends are
shown in Figure 11.
Table  1 lists the 10 most active members
asking and being asked questions. The US,
EU and Canada are in the top five both for
asking and answering questions. Among
developing countries, Brazil, Thailand and
the Republic of Korea are in the top ten
on both sides. Countries that intervene in
agricultural markets or that are more active
in agricultural trade tend to be asked more
questions.

Agriculture 41
 Figure 11: Developing countries face more questions
Figures for 1995–2014 show developing countries are asked proportionately more
questions than they themselves ask, and since 1995 they have faced more questions
than developed countries
600
500
400
300
200
100
0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Developing countries Developed countries

Source: AG-IMS

Table 1: Who asks, and who is asked, the most questions?

The top 10 most active members asking and answering questions in the committee’s
reviews, 1995–2014

Asking Questions Answering Questions

1 US 1,275 1 EU 707
2 Australia 1,258 2 US 561
3 Canada 997 3 Canada 347
4 New Zealand 960 4 Japan 302
5 EU 612 5 Switzerland 257
6 Japan 325 6 Norway 229
7 Argentina 253 7 India 212
8 Brazil 147 8 Thailand 197
9 Thailand 81 9 Korea 195
10 Korea 65 10 Brazil 188

A database of in the committee are now available in an

online database that is open to the public:
information on the Agriculture Information Management
System (Ag-IMS, http://agims.wto.org). It
agricultural trade can be used to search for information on
agricultural trade policies and the measures
policies and for implementing the policies.

measures The database is available through the

agriculture section of the WTO website
All the information that members have (www.wto.org/agriculture) or directly at
notified and the questions and answers http://agims.wto.org. It is designed to help

42 WTO Agreements Series

member governments and anyone else
find information on the agricultural trade
policies and related measures that member
governments have notified to the WTO as
part of their obligation to be transparent.
It covers all three pillars: market access,
domestic support and export subsidies
under the Agriculture Agreement’s rules and
members own commitments.
Users can also track the Agriculture
Committee’s review of how countries
are complying with the rules and their
commitments — and other concerns —
through the questions members ask each
other and their replies. This information can
be searched using a variety of keywords and
other criteria. All the questions and answers
since the WTO was set up in 1995 are online
in the database.
Resolving
disputes
If a member believes that another is violating
its commitments or an agreement (including
the Agriculture Agreement), it can take a
number of steps and ultimately seek a legal
ruling under the WTO’s dispute settlement
system. But full dispute settlement can be
complex, time-consuming and expensive,
and members would prefer to avoid litigation
if they can. The Agriculture Agreement
also provides some simpler alternatives.
In particular, the Agriculture Committee’s
reviews of how the rules and commitments
are being implemented allow members to
discuss issues and consult each other, based
on notifications or other information (the
Article  18.6 questions and answers). Some
cases of actual (or potential) breaches of
commitments have been discussed in the
committee without going any further. The
agreement also allows “counter-notifications”
— members can notify other members’
policies, although this has never been used.
Members can also ask the chairperson to
mediate (under the committee’s working
procedures). None of that prevents countries
from seeking formal dispute settlement.
Legal disputes normally cite more than one
WTO  agreement. A number of cases have
cited the Agriculture Agreement. A number
have cited other agreements and some
involving agricultural goods have not cited
the Agriculture Agreement at all. A series of
cases involving the EU’s policies on bananas
— one of the longest-running disputes in the
WTO, and under GATT before it — also cited
the General Agreement on Trade in Services
and the Import Licensing Procedures
Agreement.
Dispute settlement rulings are part of the
WTO’s jurisprudence: they clarify WTO law
and help us to understand legal provisions
such as those in the Agriculture Agreement.
The table below illustrates some of the
provisions that have been tested in some
WTO legal disputes, and the findings of
dispute panels (first-stage rulings) and
appeals. More details can be found at www.
wto.org/disputes.
Agriculture 43
 Table 2: How disputes have interpreted WTO law on agriculture
A number of panel and appeal rulings refer to the rules on subsidies under the Agriculture
Agreement and the rules of the Subsidies and Countervailing Measures (SCM) Agreement,
known in short as the Subsidies Agreement. (EC = European Communities, the official
name under WTO law of the EU in the WTO’s early years)

Agriculure Case Dispute Some of the points discussed

agreement number and
provisions reference
Articles 1(a) Korea- DS161/AB/R, Calculation of Current AMS and Current
and 1(h) Beef paras 107–115 Total AMS “in accordance with” the
(definitions) methods set out in Annex 3 and “taking
into account” the constituent data
and methods used in the supporting
material incorporated by reference in
Part IV of a members’ Schedule.
Article 1(e) US- FSC DS/108/AB/R, Definition of a subsidy; definition of an
(definitions) paras 136–142 export subsidy (i.e. export contingency)
under Articles 8 and 10.1 of the
Agriculture Agreement; and relationship
with Article 1.1 of the Subsidies and
Countervailing Measures Agreement.
Canada- DS/103/R, Export subsidy practices covered
Dairy paras 7.124– by Article 10.1 of the Agriculture
7.125 Agreement compared to coverage of
Article 1(e) and Article 9.1.
Article 3.2 and Korea- DS161/AB/R, Mode of calculation and data in the
Annex 3 Beef paras 115–129 calculation of product-specific AMS and
(domestic Current Total AMS; including source
support) of “fixed external reference price”
and definition of “production eligible”
to receive the administered price
as opposed to “production actually
purchased”.

44 WTO Agreements Series

Agriculure Case Dispute Some of the points discussed
agreement number and
provisions reference
Article 3.3 and Canada- DS103/AB/ Provision of export subsidies within
Article 8 Dairy RW2, paras the meaning of Article 9.1(c) in excess
(export 155–156 of scheduled quantity reduction
subsidies) commitment levels; resulting breach of
Articles 3.3 and 8.
US-FSC DS108/AB/R, Reference to Panel’s order of
paras 122–128 analysis to address inconsistency of a
measure with Article 3.3 in the case
of (i) scheduled and (ii) unscheduled
products.
US- DS267/AB/R, Examination of WTO-consistency
Upland paras 568–583 of a measure under the Subsidies
Cotton Agreement vs. the Agriculture
Agreement; finding of payments to
constitute subsidies contingent upon
export performance within the meaning
of Article 9.1(a) and therefore, in breach
of Articles 3.3 and 8.
Article 4.1 EC- DS27/AB/R, Market access commitments resulting
(market access Bananas paras 156–158 from the Uruguay Round negotiations;
commitments) whether the Agriculture Agreement
allows members to act inconsistently
with GATT 1994 Article XIII.

Agriculture 45
 Agriculure Case Dispute Some of the points discussed
agreement number and
provisions reference
Article 4.2 Turkey- DS334/R, paras Identification of the measure at issue;
(tariffs only) Rice 7.26–7.58; and relationship with Articles X and XI
7.108–7.138 of GATT 1994 and the Agreement
on Import Licensing; determination
of order of analysis; consideration
of whether the measure is “of the
kind which have been required to be
converted into ordinary customs duties”.
Chile- DS207/AB/RW, Origins and functions of Article 4, the
Price paras 145–226 “legal vehicle” requiring the conversion
Band of non-tariff measures affecting
agricultural products into ordinary
customs duties; focus on footnote 1;
minimum import prices; variable levies;
concept of similarity; transparency;
predictability; and consideration of the
measure at issue in this light: whether
it constitutes a border measure “similar
to” a variable import duty and to a
minimum import price; relationship
between Article 4 and Article 5 of the
Agriculture Agreement (See also WT/
DS207/RW, paras 7.14–7.103).
Korea- DS161/R, Implication of a breach of Article XI of
Beef paras 759–769 GATT 1994 and its Ad Note (relating
to state-trading operations) on the
consistency of a measure with Article
4.2 and its footnote.
India-QRs DS90/R Applicability of Article 4.2 to measures
paras 5.238– imposed under the balance of payment
5.242 provisions of the GATT 1994; incidence
of a breach of GATT Article XI that is
not justified under balance-of-payment
provisions, on consistency with Article
4.2.
Article 5.1(b) EC- DS69/AB/R, Basis for triggering the price-based
(special Poultry paras 142–153 safeguard (includes an illustration
safeguard) of arguments based on hypothetical
numbers); importance of paragraph 5 of
Article 5.

46 WTO Agreements Series

Agriculure Case Dispute Some of the points discussed
agreement number and
provisions reference
Article 5.5 EC- DS69/AB/R, Link between Article 5.1(b) and
(special Poultry paras 157–171 Article 5.5; whether the price-based
safeguard) remedy can be calculated using a
methodology that is different from
that specified in Article 5.5, e.g. by
using a different “representative price”
instead of “c.i.f. price”; and why Article
5 is characterized as being a “special”
safeguard mechanism.
Article 6 and Korea- DS161/AB/R, Data elements required to calculate
7.2(a) Beef paras 90–129 Current AMS for beef and Current
(domestic Total AMS for 1997 and 1998 in
support) accordance with the Agreement on
Agriculture; examination of scheduled
information and agriculture supporting
tables (AGST, used to supplement
commitments in members’ schedules);
and reversal of Panel findings of
inconsistency of the measure at issue
with Article 6 and Article 7.2(a).
Article 9.1(a) Canada- DS103/AB/R, Interpretation of “payments-in-
(export Dairy paras. 84–102 kind”; whether marketing boards are
subsidies) “agencies” of the government (See also
related Panel report paras 7.35–7.87).
US- DS267/AB/R, Examination of measure at issue
Upland paras 567–584 against Article 9.1(a) criteria; export
Cotton contingency requirement under the
Agriculture Agreement on, including
relationship with, and contextual
guidance from, the Subsidies
Agreement; implications for consistency
with Articles 3.3 and 8.

Agriculture 47
 Agriculure Case Dispute Some of the points discussed
agreement number and
provisions reference
Article 9.1(c) Canada- DS103/AB/ Applicable benchmark to be used
(export Dairy RW2, in determining the existence of
subsidies) paras 78–156 “payments”; relevance of an industry-
wide cost of production standard in
assessing the existence of a “payment”;
whether the revised measure involves
payments that are “financed by virtue
of governmental action”; existence
of a demonstrable link between
governmental action and the financing
of payments.
DS103/AB/RW, Definition of “payments”; adequacy of
paras. 64–123 “domestic market” or “world market”
prices as benchmarks for determining
the existence of a “payment”; whether
proof of government involvement in
marketing boards is sufficient to meet
the “financed by virtue of governmental
action” criteria; possible spill-over
effects of domestic support measures
and need to ensure integrity of
boundaries between domestic support
and export subsidy disciplines.
DS103/AB/R, Whether the term “payments” includes
paras. 103–114 “payments-in-kind”; whether the
provision of raw agricultural materials
at discounted, below-market prices
constitutes “payments” (See also
related Panel report paras 7.90–7.101).
EC-Sugar DS265/AB/R, Examination of measure at issue
paras 230–289 against Article 9.1(c) criteria; whether
cross-subsidization constitutes a
“payment” in the form of a transfer of
financial resources; export contingency
of subsidies; discussion of boundaries
between domestic support and export
subsidy disciplines (See also related
Panel report paras. 7.254–7.270 and
paras. 7.280-7.335, for a discussion of
the extent of governmental action and
control — e.g., supply, pricing, etc. —
implied by the measure at issue.)

48 WTO Agreements Series

Agriculure Case Dispute Some of the points discussed
agreement number and
provisions reference
Article 9.1(d) US-FSC DS108/AB/R, Examination of the measure at issue
(export paras 129–132 against Article 9.1(d), i.e. reducing
subsidies) the cost of marketing; implications
for consistency of the measure with
Articles 3.3 and 8 (See related Panel
discussion in paras 7.147–7.159)
Article 10.1 US- DS267/AB/RW, Whether the revised export credit
(anti- Upland paras. 255–323 guarantee scheme at issue constitutes
circumvention Cotton an export subsidy inconsistent with
on export Article 10.1 and Article 8: item (j) of the
subsidies) Illustrative List (Subsidies Agreement)
is used as a benchmark to examine
whether the associated premiums cover
the long-term operating costs and
losses; subsidies within the meaning
of Article 3.1(a) of the Subsidies
Agreement and Article 10.1 of the
Agreement on Agriculture.
DS267/AB/R, Establishment of the actual
paras. 681–714 circumvention of export subsidy
commitments: factual information
for scheduled and non-scheduled
agricultural products; application of
export credit guarantees constituting
export subsidies in a manner that
threatens to lead to circumvention of
export subsidy commitments.
US-FSC DS108/AB/RW, Relationship with the Subsidies
paras. 187–196 Agreement, in particular Articles 1.1
and 3.1; implications for consistency
of the revised measure at issue with
Articles 1(e) and 10.1 of the Agreement
on Agriculture.
DS108/AB/R, Revenue foregone; export contingency;
paras. 133–154 distinction between “export subsidy
commitments” and “export subsidy
reduction commitments”; definition of
“circumvention” and requirement to
demonstrate “actual” circumvention or
simply a “threat” of circumvention to
allege a breach of Article 10.1.

Agriculture 49
 Agriculure Case Dispute Some of the points discussed
agreement number and
provisions reference
Article 10.2 US- DS267/AB/R, Whether Article 10.2 exempts export
(anti- Upland paras. 585–641 credit guarantees, export credits
circumvention Cotton and insurance programmes from
on export compliance with the export subsidy
subsidies) provisions of the Agriculture Agreement
(See also related Panel report, paras.
7.897–7.942).
Article 10.3 Canada- DS103/AB/ Conditions to be fulfilled before the
(anti- Dairy RW2, paras. burden of proof is shifted to the
circumvention 55–77 respondent (See also related 21.5
on export Panel proceedings, paras. 5.13–5-
subsidies) 19; as well as original Panel, paras
7.32–7.34).
US-FSC DS108/R, paras. Reversal of burden of proof in two
7.134–143 distinct situations: scheduled vs. non-
scheduled agricultural products.
EC-Sugar DS265/R, paras. Reversal of burden of proof: party
7.223–231 responsible for presenting evidence
to establish the presumption that
quantities exported in excess of
scheduled volumes are not subsidized.
US- DS267/AB/R, Applicability of Article 10.3 to
Upland paras. 642–657 scheduled vs. non-scheduled
Cotton agricultural products (see also related
Panel report, paras 7.792-7.793).
Article 13(a) US- DS267/AB/R, Peace Clause, Green Box — Review
(Peace Upland paras. 310–342 of compliance with decoupling
Clause or due Cotton criteria contained in para 6(b) of
restraint) Annex 2 (decoupled income support)
when payments are contingent
upon producers’ compliance with
product-specific planting restrictions
and product-specific flexibilities;
and consequential determination of
protective effect of the Peace Clause
(see also related Panel discussion in
paras 7.354–7.414).
Article 13(b)(i) Mexico- DS341/R, paras. Implementation period of the Peace
(Peace Olive Oil 7.44–7.81 Clause and consideration of its legal
Clause or due elements; whether Article 13(b)(i) is
restraint) breached when CVD investigations are
initiated in respect of an agricultural
product; concept of “due restraint” and
meaning; burden of proof.

50 WTO Agreements Series

Agriculure Case Dispute Some of the points discussed
agreement number and
provisions reference
Article 13(b)(ii) US- DS267/AB/R, Peace Clause — Compliance of the
(Peace Upland paras. 345–394 domestic support measure at issue with
Clause or due Cotton the requirement that support should not
restraint) be ‘in excess of that decided during the
1992 marketing year’ in each relevant
year of the implementation period”;
and consequential finding regarding
entitlement to protection afforded by
Article 13 from actions” under GATT
Article XVI:1 and Articles 5 and 6 of
the SCM Agreement. (see also related
Panel, paras 7.415-7.608)
Article 13(c)(ii) US- DS267/R, paras. Peace Clause, export subsidies —
(Peace Upland 7.265–7.286; Burden of proof and establishment
Clause or due Cotton 7.751; 7.943. of a prima facie case; vulnerability to
restraint) challenges under Articles 3.1(a) and
3.2 of the SCM Agreement as well as
Article XVI of the GATT 1994 when
the measure does not conform fully
with export subsidy commitments
specified in Part V of the Agreement on
Agriculture.
Annex 2, para US- DS267/AB/R, Conformity of the measures at issue
6(b) Upland paras 310–342 with the relevant Green Box criteria,
(Green Box) Cotton i.e. ‘decoupled income support’ (See
also related Panel discussion in paras
7.354-7.414).
Annex 3 Korea- DS161/AB/R, Calculation of Current AMS;
(domestic Beef paras. 107–129 methodology for the calculation of
support market price support in paragraph 8
calculation) of Annex 3 (See also related Panel
discussion in paras 818–844).

Agriculture 51
 Agriculure Case Dispute Some of the points discussed
agreement number and
provisions reference
Annex 5 — EC- WT/L/625, Review of a proposal to rebind market
Attachment Bananas Second access concessions based on the
(special Arbitration, price gap methodology described in
treatment paras. 40–127 Attachment to Annex 5; data elements
under “tariffs to be taken into account to calculate
only”) the tariff equivalent of the level of
protection at issue, while maintaining
market access opportunities to most-
favoured nation (MFN) suppliers (i.e.
suppliers under provisions giving all
trading partners equal treatment), and
considering the margin of preference
enjoyed by preferential suppliers. (see
also First Arbitration Award, WT/L/616:
paras. 48–94)

Negotiations: In November 2001 they merged with the

broader Doha Round negotiations launched
built-in agenda at the Fourth Ministerial Conference in
Doha, Qatar. In Doha, members also agreed
and post- to work on other issues, including how
the current WTO agreements were being
Uruguay Round implemented. The entire package is often
called the Doha Development Agenda (DDA)
negotiations or the Doha Round, although officially it is
the “Doha Work Programme”.

2000–01: Article 20 and Doha
Agricultural trade reform did not end with
the Uruguay Round or with the birth of
the Agriculture Agreement. Members said
they wanted it to continue and the present
negotiations aim to do that. Countries’
commitments under the Agriculture
Agreement are just a first step.
Under the Doha Declaration the aim of the
agriculture negotiations is:
“substantial improvements in
market access; reductions of, with
a view to phasing out, all forms of
export subsidies; and substantial
reductions in trade-distorting
domestic support”.

This was written into Article 20, which says
agriculture negotiations should re-start
in 2000 (“one year before the end of the
[six-year] implementation period”). These
talks are held in “special sessions” that are
separate from the committee’s regular work.
Ministers also agreed that:
“special and differential treatment
for developing countries shall be
an integral part of all elements
of the negotiations and shall be

52 WTO Agreements Series

 embodied in (…)the rules and
disciplines to be negotiated, so as
to (…) enable developing countries
to effectively take account of their
development needs, including food
security and rural development”
(para. 13 and 14 of the Doha
Declaration).
2003–05: Cancún, Geneva
framework and Hong Kong
The Fifth Ministerial Conference in Cancún,
Mexico, in September 2003, was intended
as a stock-taking meeting. Members were
supposed to agree on how to complete the
rest of the negotiations. But discord soured
the meeting, in particular on agricultural
issues, including cotton. It ended in deadlock.
It was only 10 months later that real progress
was achieved in agriculture. In the early
hours of 1 August 2004 members meeting
as the General Council agreed on a set of
decisions (sometimes called the July 2004
package). The main section on agriculture
was an annex containing a “Framework for
Establishing Modalities in Agriculture”, in
other words an outline of the shape of what
could be a final deal.
Even though the original 1 January 2005
deadline for completing the talks was missed,
members were able to narrow their differences
in just over a year, at the Hong Kong Ministerial
Conference in December 2005.
2006–08: draft ‘modalities’, then
impasse
A first version of a draft agriculture text was
circulated in 2006. This and later revisions
contain proposed formulas for cutting
tariffs and subsidies, along with various
new provisions that would be included in the
future agreement on agriculture, and other
details, including a variety of exceptions
and flexibilities for various situations such
as development, the needs of smaller or
poorer countries, or the political sensitivity of
particular products — in other words, these
are the proposed methods or “modalities” for
further reform.
Much of 2007 and 2008 saw intensive
negotiations. Numerous working papers
were developed on the three pillars of the
agriculture negotiations, including further
versions of the draft modalities. In July
2008, a group of ministers went to Geneva
to try to negotiate a breakthrough on key
difficulties in agriculture and on market
access for other products (non-agricultural
market access or NAMA). They failed and
consultations continued from September.
Drawing on over a year of negotiations,
on 6  December 2008 the chair of the
agriculture negotiations issued a fourth
revision of the draft “modalities” (document
TN/AG/W/4/Rev.4, often called simply
“Rev.4”). It captured the progress made
and highlighted the remaining gaps in WTO
members’ positions. This draft remains the
most up-to-date negotiating document on
the table.
The following two years saw the talks at a
standstill. Members focused on technical
discussions on how to organize the data
necessary to calculate commitments.
From 2011 the talks returned to trying
to narrow the differences in members’
positions on the draft “modalities”. At the
Eighth Ministerial Conference at the end
of the year, ministers agreed that for the
time being members should concentrate
on topics where progress was most likely
to be made. Different groups of members
contributed to a set of proposals on issues
they felt could be agreed at the 2013 Bali
Ministerial Conference.
Agriculture 53
 2013: The Bali Package
At the Ninth Ministerial Conference in Bali
in December 2013, ministers agreed on
a package of issues. In agriculture these
included four decisions and one declaration:
• Ministers struck a compromise on public
stockholding for food security
purposes: they agreed that breaches
of domestic support commitments
resulting from developing countries’
public stockholding programmes for
food security involving food purchases
at administered prices would not be
challenged legally provided certain
conditions were met. The decision was
temporary. In November 2014 the General
Council clarified that this protection
against legal action would remain until a
permanent solution is agreed.
• Ministers agreed to expand the Green
Box list of “general services”
(explained above) — it now includes
spending on for land use, land reform,
water management, rural livelihood
security and other purposes related to
development and reducing poverty.
• Ministers issued a strong political
statement that governments will ensure
all forms of export subsidies are
kept low and a commitment to enhance
transparency and improve monitoring.
This covers the whole range of issues
known as “export competition”, including
measures that may have effects equivalent
to export subsidies — international
food aid, export credits, export credit
guarantees, insurance programmes and
the activities of agricultural state trading
enterprises (STEs).
• The Bali Ministerial Decision on tariff (or
tariff-rate) quota administration calls
54 WTO Agreements Series
for countries to notify how actual imports
compare with the sizes of the quotas (their
“fill rates”). The Agriculture Committee is
to monitor this, combining consultations
with the speedy information-sharing on
under-filled quotas. The objective is to
reduce the possibility that governments
create trade barriers through the methods
they use to distribute the quotas among
importers.
• In Bali, ministers also agreed to beef
up the WTO’s work on cotton. Members
would now meet twice a year to discuss
developments related to trade in
cotton — particularly market access,
domestic support (or subsidies) and export
competition (export subsidies and policies
that are equivalent to export subsidies).
These dedicated discussions would be
linked to the agriculture negotiations,
and aim to increase transparency and
strengthen monitoring (more on cotton,
below).
The deal on the “Bali Package” was struck
after intensive consultations almost round
the clock from 4 December until the meeting
closed on 7  December. The Bali Package
was the first major agreement in trade
negotiations among members since the
WTO was formed in 1995.
2015: The Nairobi Package
The successful outcome of the Tenth
Ministerial Conference in Nairobi in
December 2015 includes a decision to
eliminate agricultural export subsidies and
set disciplines on export measures with
equivalent effect, the most important reform
of international trade rules in agriculture
since the WTO was established. As was
the case in Bali, the Nairobi Package was
agreed after an intense consultation process
both during the preparatory phase in Geneva
and during the Ministerial Conference.
In agriculture the Nairobi Package includes
four decisions:
• Members agreed to eliminate agricultural
export subsidies more than 50 years
after a similar decision had been made
for industrial products. According to
the decision, members shall eliminate
export subsidies according to different
timelines. Export subsidies shall be
eliminated by developed country
members immediately as a general
rule, with delayed implementation under
certain conditions for a limited number of
products. Developing country members
have longer implementation periods,
including the flexibility under Article 9.4.
The decision also contains disciplines, in
particular on maximum repayment terms,
on export credits, export credit guarantees
and insurance programmes. Members
also agreed to ensure that agricultural
exporting state trading enterprises do not
operate in a manner that would circumvent
the other provisions of the decision.
Finally, the decision includes disciplines
on food aid aimed at minimizing the risk
of commercial displacement and more
specifically ensuring that food aid does
not negatively affect domestic producers
and local or regional markets.
• Special Safeguard Mechanism…
Ministers decided that negotiations to
establish a special safeguard mechanism
– a tool that would allow developing
country members to raise tariffs
temporarily to deal with import surges or
price falls – would take place in dedicated
sessions of the Committee on Agriculture
in Special Session and progress in these
negotiations would be regularly reviewed
by the General Council.
• Ministerial Decision on Public
Stockholding for Food Security
Purposes reaffirmed the existing
commitment and encouraged members
to make all concerted efforts to agree
on a permanent solution and to continue
holding negotiations in dedicated sessions
of the Committee on Agriculture in Special
Session in an accelerated time-frame.
• Finally, the Nairobi Ministerial Decision
on Cotton contains disciplines covering
both trade and development aspects –
including provisions on market access,
domestic support and export competition
(more on cotton, below).
By adopting the Nairobi Ministerial
Declaration, members expressed their
strong commitment to advance negotiations
on the remaining Doha Round issues,
including advancing work in all three pillars
of agriculture, namely domestic support,
market access and export competition.
Cotton
2003: birth of the “sectoral
initiative”
Two years after the Doha Round was
launched, four sub-Saharan African
countries called for a special focus on cotton,
a product that was particularly important to
them. The four were Benin, Burkina Faso,
Chad and Mali, who have become known as
the “Cotton Four” or “C4”. They raised three
main points:
(1) the damage that they believed was
inflicted on them by richer countries’
cotton subsidies
Agriculture 55
 (2) a call for the subsidies to be eliminated
(3) a call for compensation to be paid so
long as the subsidies remain, to cover
the economic losses they caused.
The four first wrote to the WTO Director-
General on 30 April 2003, introducing a
“Sectoral Initiative in Favour of Cotton”.
This became an official document in the
agriculture negotiations (document TN/AG/
GEN/4 of 16 May 2003). It was presented
on 10 June 2003 to the Trade Negotiations
Committee by the Burkina  Faso President
Blaise  Compaoré, the first time a head of
state had addressed a WTO committee
(other than a Ministerial Conference). The
proposal was also discussed the following
month, on 1  and 18  July, meetings of the
agriculture negotiations (“Special Sessions”
of the Agriculture Committee) also discussed
the proposal.
2003: Cancún Ministerial
Conference
The proposal developed into two documents
for the September 2003 Cancún Ministerial
Conference (documents WT/MIN(03)/W/2
and WT/MIN(03)/W/2/Add.1). The Cotton
Four pressed for a conference decision
under an agenda item titled “Poverty
Reduction: Sectoral Initiative in Favour of
Cotton — Joint Proposal by Benin, Burkina
Faso, Chad and Mali”.
No conclusion was reached in Cancún
because of a failure to agree on the whole
Doha Round package. Members disagreed
over whether this sectoral initiative should
be handled separately or whether it should
come under the agriculture negotiations’
three pillars: market access, domestic
support and export subsidies. They also
differed over the proposal for compensation:
56 WTO Agreements Series
whether it should be paid at all, and if so how.
One view was that if there were to be some
kind of payment, then it should be in the form
of development assistance. This then raised
a further question about who should handle
the funding: the WTO is not a development
agency and it has no budget for assistance
other than for training officials on WTO
issues. (Eventually the development aspect
of cotton was handled on a separate track
from the trade negotiations.)
If the Cancún meeting had ended
successfully, the ministerial declaration was
set to have included a separate paragraph
on a cotton sectoral initiative. But it did not
and in early 2004 the debate continued,
including on how the issue would fit in
with the Doha Round and its agriculture
negotiations.
2004: ‘framework’
Almost a year later, on 1 August 2004, a
breakthrough was achieved on the failed
Cancún package of issues. For the first
time, cotton was included as a specific
subject in the Doha Round. The General
Council Decision (document WT/L/579),
which included an outline for proceeding
in the agriculture talks, referred to cotton
both in the main text, and in its Annex  A
(the framework for agriculture). Members
said they considered the cotton initiative
to be important in two aspects: trade and
development. They agreed to handle these
separately but also stressed that the two
were complementary (paragraph 1.b).
Trade: The mandate for trade negotiations
on cotton is in paragraph 4 of Annex A. The
talks within the agriculture negotiations
will aim for quick and ambitious reform,
specifically for cotton (over the years the
phrase “ambitiously, expeditiously and
specifically” has been repeated regularly
in the talks on cotton). It instructs the
agriculture negotiations to ensure that the
cotton issue is given “appropriate” priority,
independently from other sectors.
In the August 2004 framework, members
also agreed to create a Sub-Committee on
Cotton. It would meet periodically and report
to the broader agricultural negotiations (the
Agriculture Committee’s “Special Sessions”)
where progress would be reviewed. The
framework said the work on cotton should
deal with trade-distorting policies in all three
agricultural pillars (market access, domestic
support, and export subsidies), as specified
in the original Doha Declaration and the
framework itself.
Development: The main text of the August
2004 framework sets up the separate track
of the development aspects of cotton. The
WTO Secretariat and the Director-General
are to continue to work with the development
community and international organizations
such as the World Bank, International
Monetary Fund, Food and Agriculture
Organization and International Trade Centre.
The purpose is to make progress on the
development aspects of cotton and to report
regularly to the General Council.
Negotiations on cotton
Cotton Sub-Committee
As agreed in the August 2004 decision, the
Cotton Sub-Committee was officially set
up at the 19  November  2004 agriculture
negotiations meeting, to focus on cotton as
a specific issue in the agriculture talks.
The terms of reference are in document TN/
AG/13. The subcommittee is open to all
WTO members, and observer governments
and international organizations — as is
the case for all Doha Round negotiating
groups and almost all WTO bodies. It reports
periodically to the agriculture negotiations
sessions, which in turn report to the umbrella
Trade Negotiations Committee, General
Council and Ministerial Conference.
The sub-committee works on “all trade-
distorting policies affecting the sector,” in
the “three pillars of market access, domestic
support, and export competition (i.e.
subsidies and related issues)” as specified in
the 2001 Doha Declaration, and the August
2004 framework. The sub-committee is also
to take into account the need for “coherence
between trade and development aspects of
the cotton issue”.
2005: Hong Kong Ministerial
Declaration
The next step in refining the objectives for
cotton came in 2005 at the Hong Kong
Ministerial Conference.Ministers agreed that:
(1) all forms of export subsidies for cotton
would be eliminated by developed
countries in 2006 (a target that was
missed because the Doha Round as a
whole remained deadlocked)
(1) developed countries would allow cotton
from least developed countries to be
imported duty-free and without quotas
(2) trade-distorting domestic subsidies
for cotton would be reduced more
ambitiously than for agriculture as a
whole and for other farm products, over
a shorter period.
Ministers repeated the mandate from the
August 2004 decision, to address cotton
Agriculture 57
 “ambitiously, expeditiously and specifically”
within the agriculture negotiations, and to
tackle all trade-distorting policies affecting
the sector in the three pillars of market
access, domestic support and export
competition, as specified in the 2001 Doha
Ministerial Declaration (document WT/MIN
(05)/DEC, paragraph 11).
2008: Revised Draft Modalities
for Agriculture
In December 2008, the chairperson of the
agriculture negotiations circulated the fourth
revision of a draft for concluding the talks
(document TN/AG/W/4/Rev.4, often called
just “Rev.4”). Developed from inputs from
members in months of negotiations, the
text contains proposed formulas for cutting
tariffs and subsidies along with various
new provisions to be included in a possible
future agreement on agriculture, and other
details, including a variety of exceptions
and flexibilities for various situations — in
other words, the methods or “modalities”
for further reform. It includes the Cotton
Four’s proposed formula for reducing the
aggregate measurement of support (AMS,
explained above), designed mathematically
to produce a steeper cut than for the
general reduction for agriculture, as well as
a proposed limitation for Blue Box support.
The draft as a whole has not been agreed
even though some parts were close to being
settled, and there has been no consensus on
the formula for cotton.
The draft refers to cotton in several places,
including on domestic support (paragraphs
43, and 54 to 58), on market access
(paragraphs 155-156), and on export
subsidies and related issues (paragraphs
168-169). Annex M on monitoring and
surveillance also refers to cotton in
paragraphs 4(e) and 8(c). Since 2008, the
58 WTO Agreements Series
talks have seen little progress, and this draft
has remained the main document on the
table until the time of writing (mid-2015).
2013: Bali Ministerial Decision
on Cotton
Since then (by mid-2015), little has changed
in the substance of the negotiations
on cotton, although a large amount of
information on technical assistance has
been shared in the parallel meetings on
development.
At the December 2013 Bali Ministerial
Conference, members did agree to
strengthen their ability to keep themselves
informed and to monitor what is happening
to trade in cotton, in market access, domestic
support and export subsidies, particularly
for least developed countries’ exports. This
emerged from a proposal from the Cotton
Four, two months earlier (document TN/AG/
GEN/33). Ministers agreed in Bali to achieve
this through twice-yearly discussions,
which began in June 2014 (the decision is
in document WT/MIN/(13)/41, reports of
the meetings are in documents in the TN/
AG/ series starting with TN/AG/28). The
discussions rely on factual information
compiled by the WTO Secretariat from
members’ notifications. Members can
also provide additional information. (See
documents TN/AG/GEN/34 and revisions.)
Once again, the Bali Ministerial Conference
reaffirmed previous commitments,
particularly from the 2004 General Council
decision, the 2005 Hong Kong Ministerial
Declaration, and the commitment of the
2011 Geneva WTO Ministerial Conference
to continue efforts to deal with cotton
“ambitiously, expeditiously and specifically”
within the agriculture negotiations, using the
2008 revised draft as a reference.
Ministers also reaffirmed the importance
of the development assistance aspects
of cotton and committed to continued
engagement in the Director-General’s
Consultative Framework Mechanism on
Cotton to strengthen the cotton sector in the
LDCs.
2015: Nairobi Ministerial
Decision on Cotton
The Nairobi Ministerial Decision on Cotton
(document WT/MIN(15)/46) is the result
of focused consultations involving mainly
the major cotton players, including the co-
sponsors of the Sectoral Initiative in Favour of
Cotton – Burkina Faso, Benin, Mali and Chad
(the Cotton Four or C-4). Those consultations
were based on a proposal tabled by the C-4
in Geneva on 12 October 2015.  in the Director-General’s Consultative
The Decision on Cotton covers the three
pillars of market access, domestic support
and export competition. On market access,
developed country members, and developing
country members in a position to do so,
have committed to grant, to the extent
provided for in their respective preferential
trade arrangements, dutyfree and quotafree
market access for exports by LDCs of cotton
and cotton-related agricultural products.
Ministers also agreed that the disciplines
and commitments contained in the Nairobi
Decision on Export Competition would
be implemented with regard to cotton
immediately by developed country members
and not later than 1 January 2017 by
developing country ones.
On domestic support, the Decision on
Cotton acknowledges the efforts made by
some members to reform their domestic
cotton policies, but emphasizes that some
more efforts remain to be made.
Finally, ministers also agreed in Nairobi to
extend the transparency and monitoring
process initiated at the Bali Ministerial
Conference (through biannual dedicated
discussions based on factual information
compiled by the WTO Secretariat).
Ministers reaffirmed the importance of the
development assistance aspects of cotton
and committed to continued engagement
Framework Mechanism on Cotton. They
recognized in this regard that the WTO Aid
for Trade initiative, including through the
Enhanced Integrated Framework, should
play a key role in strengthening the cotton
sector in LDCs.
Summary
Box 3 summarizes key parts of the
Agriculture Agreement and the related
commitments, as described above. The
legal text of the Agreement on Agriculture is
presented at the end of this publication.
Agriculture 59
 Box 3: Key elements of the Agriculture Agreement and related commitments

Policy area Instrument Developed Developing

countries countries

Market access Article 4.2, Article Prohibition on the use of restrictions on imports
4.1 and Schedules other than tariffs. All tariffs bound

Article 5 Special agriculture safeguard mechanism

against import volume surges or import
price declines below a trigger level (limited
to “tariffied” products and not applicable
to imports under related tariff quota
commitments)

Schedules Tariffs resulting from conversion of non-tariff

border measures under negotiating modalities
(“tariffication”) plus pre-existing tariffs on all
other agricultural products to be reduced

Schedules Implementation of current and minimum access

opportunity commitments in respect of tariffied
products

Schedules Average tariff Average tariff

reductions of 36% reductions of 24%
(minimum 15%) over (minimum 10%) over
6 years 10 years.
Where “ceiling
bindings”
commitments
undertaken
reductions not
required except on ad
hoc basis.
Least developed
not required to
undertake reduction
commitments

Domestic Articles 6, 7 and Policies divided into two groups; (i) permitted
support Annex 2 policies (Green Box), (ii) other policies included
in the Aggregate Measure of Support (AMS)
subject to reduction commitments (Amber Box)

Article 6.5 Direct payments associated with production

limiting programmes (Blue Box) not in Green
Box but excluded from AMS

60 WTO Agreements Series

Box 3: Key elements of the Agriculture Agreement and related commitments

Policy area Instrument Developed Developing

countries countries

Article 6.2 Developing countries

allowed to use some
types of investment
and input subsidies
under certain
conditions

Article 6.4(a) and De minimis provision De minimis provision

(b) allows exclusion of allows exclusion from
support not exceeding AMS of product-
5% of output value specific and non-
from AMS product specific
support not exceeding
10% of respective
current output value

Schedules Total AMS support to Total AMS support to

be reduced by 20% be reduced by 13.3%
over 6 years over 10 years

Schedules Least-developed
countries must bind
AMS support level
if applicable but not
required to reduce it

Export Article 9 Definition of export subsidies subject to

subsidies reduction

Article 10 Other export subsidies subject to anti-

circumvention provisions which include
disciplines relating to food aid

Article 3.3 Prohibition on the use of export subsidies on

products not subject to reduction commitments

Schedules Distinct reduction Two-thirds of the

commitments on both reduction required for
volume (21%) and developed countries
budgetary outlays over ten years
(36%) over six years

Article 11 For incorporated/

processed products
budgetary outlays
only (36%)

Agriculture 61
 Box 3: Key elements of the Agriculture Agreement and related commitments

Policy area Instrument Developed Developing

countries countries

Article 9.4 Exception during

the implementation
period in respect of
certain marketing and
internal transportation
subsidies

Export Article 12 Requirement for advance notice and obligation

prohibitions to consult on request and supply information in
and restrictions case of new export restrictions on foodstuffs

Article 12.2 Exception for

developing countries
that are not net-
exporters of the
foodstuff concerned

Other aspect Article 13 Peace clause

Article 17 WTO Agriculture Committee given the task

of overseeing the implementation of the
agreement and related commitments

Article 16 Marrakesh Ministerial Decision on Measures

Concerning the Possible Negative Effects of the
Reform Programme on Least-Developed and
Net Food-Importing Developing Countries

Sanitary and Article 14 Separate Agreement: Reaffirms right to

phytosanitary countries to set their own health and safety
measures standards provided they are justified on
scientific grounds and do not result in arbitrary
or unjustified barriers to trade; encourages
use of international standards; includes certain
special and differential treatment provisions

62 WTO Agreements Series

Frequently asked questions
What is the purpose of
the Agriculture Agreement?
Agriculture is important, but trade is
distorted by subsidies and protectionism —
hurting producers (and some consumers)
who are not supported or protected. The
1994 agreement is a first step in the effort
to reduce the distortion.
The importance of agricultural trade cannot
be overemphasized. In many countries,
agriculture is an important economic activity.
This is particularly the case in developing
nations. Agriculture generates income and
wealth. It creates jobs. It plays a major role
in domestic production of food and other
produce, and in exports. It provides revenue
for the government and foreign exchange for
the country. Trade in agricultural products
contributes to global food security by helping
countries to obtain food supplies from world
markets when they or their regular suppliers
suffer shortages because of bad harvests or
other conditions.
But agriculture also became a source of
tension because of what some countries
saw as unfair competition. Before the
1986–94 Uruguay Round negotiations,
which produced the Agriculture Agreement,
international agricultural trade was less
disciplined than for industrial products —
agriculture had escaped many of the rules
of the General Agreement on Tariffs and
Trade (GATT). The result was large-scale
subsidies on exports and domestic trade
in many countries, and high tariffs and
other import barriers that were difficult to
penetrate. Furthermore, only about one
third of agricultural products had tariff
limits that were legally bound under the
GATT. International trade in agriculture
was “distorted” — it was untransparent,
unpredictable and massively protected.
Only the richest countries could subsidize
and protect on this scale. It was unfair
competition for many countries. Developing
countries with comparative advantage in
agriculture were prevented from developing
fully. They got together with some major
exporting developed countries to agitate for
reform.
Tensions grew. Subsidizing countries felt they
had to defend their agriculture by increasing
export subsidies, which lowered prices in the
1980s. Gradually more and more countries
realized they needed tighter multilateral rules
to create a fairer agricultural trading system
operating closer to market conditions. The
Uruguay Round negotiations were launched
in 1986. When it concluded seven years
later it had produced numerous changes in
the rules of agricultural trade. Existing rules
were clarified. Practices that had previously
escaped were brought into the rules. And a
new system for settling disputes was agreed.
Agriculture was covered specifically for
the first time through two new multilateral
agreements: the Agriculture Agreement and
the Sanitary and Phytosanitary Measures
(SPS) Agreement.
As explained above, for the first time, the
Agriculture Agreement required member
countries to limit their agricultural export
subsidies and trade-distorting domestic
support and to set legally binding limits
Agriculture 63
 on their tariffs on all agricultural products.
The reform introduced by the Agriculture
Agreement aims for:
“substantial progressive reductions
in agricultural support and
protection sustained over an
agreed period of time, resulting
in correcting and preventing
restrictions and distortions in world
agricultural markets”.
The Agreement says the reform should
be implemented equitably among all
members: it seeks to strike a balance
between agricultural trade liberalization and
governments’ rights to pursue legitimate
agricultural policy goals. Those goals include
concerns that go beyond trade (“non-trade
concerns”) such as food security and the
need to protect the environment. Developing
countries are given special treatment.
What is ‘distortion’?
Distortion is not defined in the Agriculture
Agreement. Broadly, the word is used to
mean when prices or quantities differ from
those that would occur under competition.
In other words, trade is distorted if prices
are higher or lower than “normal”, and if
quantities produced, bought, and sold are
also higher or lower than “normal” — i.e.
than the levels that would usually exist in a
competitive market.
The WTO Dictionary of Trade Policy Terms
says a distortion is:
“a measure, policy or practice that
shifts the market price of a product
above or below what it would be
if the products were traded in a
competitive market. Measures
causing distortions include
64 WTO Agreements Series
subsidies, import restrictions and
restrictive business practices”.
This means that when producers,
consumers, importers and exporters decide
whether to buy, sell or produce, they are
influenced by factors other than competitive
market conditions, such as the subsidies
they receive or the higher prices of protected
markets.
For example, import barriers and domestic
subsidies can make crops more expensive
on a country’s internal market. The higher
prices can encourage over-production and
reduce consumption. If the surplus is to be
sold on world markets, where prices are
lower, then export subsidies are needed.
As a result, the subsidizing countries can
produce and export considerably more and
import less than they normally would. Their
exported surpluses add to world supply,
lowering prices even further.
Governments usually have three reasons
for supporting and protecting their farmers,
even if this distorts agricultural trade:
• food security: to ensure that the food
produced is adequate to supply a share
of the country’s needs
• to support farmers and shield them from
the uncertainty inherent in agricultural
markets (for example, harvests depend
on the weather)
• “non-trade concerns”: to meet objectives
other than trade (such as rural development
or protecting the environment).
But these policies have often been
expensive, and they have created gluts
leading to trading tensions. Countries with
less money for subsidies have suffered. The
debate in the negotiations is whether these
objectives can be met without distorting
trade or doing so minimally.
Does the WTO monitor
members’ agricultural
policies?
Yes, when they involve trade. The WTO
is its members: it is a “member-driven”
organization, and its membership monitors
how well countries are respecting their
commitments.
This is done in the different committees,
which consist of the entire membership.
Delegations ask questions to clarify what
other members are doing, including in
information they have notified. The purpose
is to ensure the various agreements are
being implemented transparently.
In agriculture, this is handled by the
Agriculture Committee, one of the
subsidiary bodies of the Goods Council.
The committee’s role in notifications and
members’ questions and answers are
explained above. Briefly, it oversees and
monitors how members are implementing
the Agriculture Agreement and their
commitments. This is based on notifications
and a provision allowing members to raise
issues about agricultural trade reform
under the Agreement. Even when a concern
has been discussed in the committee,
members can still seek a legal ruling in
the WTO’s dispute settlement system, the
ultimate arbiter of whether agreements and
commitments are being respected.
How do we know what
members have committed
to in agriculture?
The answer is in publicly available legal
documents listing the commitments and how
they were phased in, known as “schedules”.
They can be found on the WTO website on
a number of pages including the sections on
agriculture, individual countries’ pages and
market access:
• www.wto.org/agriculture
• www.wto.org/[member’s name]
• www.wto.org/marketaccess
A “schedule” lists a country’s maximum
tariffs on imports, the commitments on
tariff quotas (where duty is lower on imports
within the quota than on quantities outside),
the products where the member claims the
right to use the special safeguard (temporary
tariff increases to deal with import surges or
price falls, and the commitments on domestic
support and export subsidies. These are
listed by individual product, often categorized
in great detail, or by broader groups of
products or for agriculture as a whole.
How are developing countries
treated differently?
Developing countries are allowed a number
of special rights, including making gentler
cuts, to phase them in over a longer period,
and to use some kinds of subsidies that are
outlawed or capped for developed countries.
Least developed countries have not had to
make any cuts.
The official term for this is “special and
differential treatment” (S&D or SDT). It is
used generally in all WTO topics, not only
agriculture. Development and the interests
of developing countries are at the heart of
the WTO’s work.
This special and flexible treatment (as
explained above) is included in the Agriculture
Agriculture 65
 Agreement, the commitments developing
countries make in their “schedules”, and in an
agreement to look after the interests of poorer
food importers — the Marrakesh Decision
on Measures Concerning the Possible
Negative Effects of the Reform Programme
on Least-Developed and Net Food-Importing
Developing Countries (NFIDCs).
Is it true that richer countries
are allowed to subsidize more
and only they can use the
special safeguard?
In neither case is that description exactly
true. For subsidies (domestic support and
export subsidies), the present rules are
the result of much higher subsidies that
existed at the start of the Uruguay Round
in the mid-1980s. The reform that was
agreed required countries to reduce their
subsidies, and not to increase them. Those
that had distorting subsidies at the start
of the talks were allowed to continue, so
long as they promised to reduce them to a
lower level. They included both developed
and developing countries. Members agreed
that the cuts should be percentages of the
original levels, so the countries starting
with larger subsidies than others ended up
with a larger allowance, but this was lower
than before and the difference was smaller.
Members also pledged to continue the
reform, and this is now being negotiated
in the Doha Round where the objective is
to narrow the gap and to eliminate export
subsidies completely for all countries.
The rules also allow additional types of
subsidies for development and other
purposes. These are outlined in the FAQ
on developing countries and in the sections
above on domestic support (including de
minimis), export subsidies, and special
flexibility provisions for developing countries.
66 WTO Agreements Series
Meanwhile, the special safeguard (temporary
tariff increases triggered by import surges
or price falls) was available to all countries
who committed to “tariffication” (explained
in more detail above). This is when countries
converted their import restrictions into
equivalent tariffs, and opened up access to
their markets through tariff quotas. They
were allowed to use the special safeguard
in case the market opening left their farmers
too vulnerable. Developed countries and
some developing countries did this and they
have scheduled the right to use the safeguard
on the products concerned. Alternatively,
developing countries could choose simply
to set high tariffs across the sector without
converting import restrictions into tariffs.
Several developing countries chose this
alternative, which is why they do not have the
right to use this safeguard, although they can
still use the more general one.
How can governments protect
their domestic agricultural
markets?
Allowed:
• tariffs (“ordinary customs duties”) within
the agreed (and legally bound) ceilings
• temporary tariff increases as a “special
safeguard” where the right has been
reserved
• “other duties and charges” up to maximums
also listed as binding commitments
• measures that are allowed under other
agreements such as:
– general safeguards
– anti-dumping measures
– regulations on food safety and
animal and plant health (sanitary and
phytosanitary measures)
 – other product standards, regulations
and labelling requirements (technical
barriers to trade).
Not allowed:
• tariffs and other duties and charges
exceeding the legally agreed maximums
• quotas other than tariff quotas (lower
tariffs on quantities inside the quotas
than outside)
• import bans
• import duties that are not fixed (“variable
levies”)
• minimum import prices
• discretionary import licensing
• voluntary export restraints (usually
bilateral agreements between importers
and exporters)
• other similar measures unless listed as
allowed.
See more details in the section on market
access above.
Is the WTO Agriculture
Agreement the only one
dealing with agriculture?
No. Agricultural goods and services are also
covered by the General Agreement on Tariffs
and Trade, and all other WTO agreements.
That includes the agreements dealing with
food safety and animal and plant health (the
Sanitary and Phytosanitary Measures or SPS
Agreement), and with product standards,
regulations and labelling (the Technical
Barriers to Trade or TBT Agreement).
Agricultural services come under the General
Agreement on Trade in Services (GATS), and
issues such as trademarks and inventions
come under the Trade-Related Aspects
of Intellectual Property Rights (TRIPS)
Agreement. Even agricultural subsidies also
come under the more general Subsidies and
Countervailing Measures (SCM) Agreement.
And tariff quota administration — the way the
quotas are shared out among importers —
comes under GATT Article XIII and the Import
Licensing Agreement.
Legally speaking, this extension to other
agreements is covered by Article  21 of the
Agriculture Agreement.
The Agriculture Agreement prevails if it
conflicts with another agreement. For
example, the Subsidies Agreement outlaws
export subsidies (Article 3.1(a)) but they are
allowed under the Agriculture Agreement
within the limits pledged by countries that
had the subsidies and agreed to reduce them
(members “with reduction commitments”) —
members without reduction commitments
have agreed not to subsidize exports.
What does the WTO
Secretariat do?
The WTO Secretariat is not the WTO.
The WTO is its members. The Secretariat
supports members’ work in the WTO. The
Secretariat’s main duties are to supply
administrative, technical and professional
support for the various councils and
committees, to monitor and analyse
developments in world trade, to provide
information to the public and the media,
to organize the ministerial conferences,
to support legal work such as dispute
settlement, and to provide technical
assistance for developing countries.
Agriculture 67
 WTO technical assistance is described
as “capacity building” — helping developing
countries gain the capacity to work
effectively within the multilateral trading
system’s rules and procedures. This is an
important component of the Secretariat’s
work. The main purpose is to strengthen
the staff and institutions of developing
countries (and formerly centrally-planned
economies) so their countries can take full
advantage of the multilateral trading system,
which is based on rules. It helps them enjoy
their rights and meet their obligations.
Training for officials is central, but activities
are also organized for other groups such
as parliamentarians, non-governmental
organizations and journalists. Some courses
and workshops are in Geneva; others are in
countries or regions around the world. Online
training is also available.
In agriculture, the focus is on helping
members understand the disciplines of the
Agriculture Agreement, its implementation,
how transparency works, and the activities
of the Agriculture Committee. This helps
members take advantage of opportunities
provided by the reform to pursue their trade
interests. That includes participation in
the Agriculture Committee. The training is
tailored as much as possible to the needs of
the beneficiaries, particularly developing and
least developed countries. WTO members
can ask to receive technical assistance,
ensuring that it is focused and provided
quickly, to meet the countries’ needs.
The Secretariat also cooperates
regularly with other intergovernmental
organizations. In agriculture it participates
in the UN High-Level Task Force on the
Global Food Security Crisis (established by
the United Nations Chief Executives Board
in April 2008 following the rise in global
food prices and the crisis it triggered). The
Task Force seeks food security, looking
68 WTO Agreements Series
comprehensively at issues such as the
availability of food, access to it, stability of
prices and supply and how the food is used.
In 2012, the Zero Hunger Challenge
was launched at the UN Conference on
Sustainable Development (“Rio+20”).
The challenge is to eradicate hunger
from the world through five “themes”,
including ensuring that all people have
adequate access to nutritious food and
that the systems for producing, supplying
and acquiring food are environmentally
sustainable.
The WTO also participates in the Agricultural
Market Information System (AMIS)
Secretariat, a G20 initiative established
in June 2011 to enhance food market
transparency and encourage international
policy coordination under conditions of high
price volatility. Technical representatives
from participating countries ensure data
collection, analysis and provision of
information (production, stocks, trade,
utilization and prices) of the major food
crops. A Market Monitor is published on
a monthly basis, thus fostering a better
understanding of the international market
situation and outlook of rice, corn, soybean
and wheat markets, as well as recent policy
developments.
Jargon buster
Amber Domestic support for
Box agriculture that is considered
to distort trade and therefore
subject to reduction
commitments. Technically
calculated as “aggregate
measurement of support”
(AMS)
AMS aggregate measurement
of support, the annual
figure for trade-distorting
domestic support calculated
according to the Agriculture
Agreement’s requirements.
The AMS support can be for
specific products, or available
more generally. (The term
is defined negatively: all
support for farmers and other
producers, except support
that does not have to be
reduced or is allowed without
limit).
AoA Agreement on Agriculture
Blue Box Amber Box types of support,
but with constraints on
production or other conditions
designed to reduce the
distortion. Currently not
limited.
c.i.f. cost, insurance, freight
(included in the price)
CoA Committee on Agriculture
CoASS Committee on Agriculture
in Special Session, the
official name for agriculture
negotiations meetings in the
Doha Round
de minimis Amber Box supports in small,
minimal or negligible amounts
that are allowed even though
they distort trade — currently
limited to 5% of the value
of production for developed
countries, generally 10% for
developing.
distortion When prices and production
are higher or lower than levels
that would usually exist in a
competitive market..
EMS equivalent measure of
support, used when AMS
cannot
f.o.b. free on board (price,
excluding insurance and
freight)
GATT The General Agreement
on Tariffs and Trade. The
abbreviation is used for
both the legal text and the
institution that oversaw the
multilateral trading system
from 1948 to 1994. (For
simplicity, this explanation
uses “GATT” for either the
pre-WTO version — officially
GATT 1947 — or the current
one — officially GATT 1994
and including the amended
GATT 1947)
GATT 1947 The text of GATT as used
from 1948 until amended by
the WTO Agreements which
came into force in 1995
GATT 1994 The General Agreement on
Tariffs and Trade, as revised
in 1994, which is part of the
WTO Agreements. GATT
1994 includes GATT 1947
together with amendments
Agriculture 69
 Green Box Domestic support for
agriculture that is allowed
without limits because it does
not distort trade, or at most
causes minimal distortion
LDC least-developed country
MFN most favoured nation, in the
WTO, the principle of treating
trading partners equally
MTO Multilateral Trade
Organization — the proposed
name of the new organization
that eventually became the
WTO, used during Uruguay
Round negotiations (appears
in negotiating documents
such as “Modalities” for
agricultural commitments)
NFIDC net food-importing developing
country
notification A transparency obligation
requiring member
governments to report trade
measures to the relevant
WTO body if the measures
might have an effect on other
members.
OTDS overall trade-distorting
domestic support. In the
Doha Round agriculture
negotiations, it builds on the
concepts of Amber Box + de
minimis + Blue Box support.
reduction Legally binding commitments
commitment to cut tariffs and subsidies.
Members without reduction
commitments on export
subsidies and trade-distorting
domestic support cannot
subsidize exports at all, and
can only use trade-distorting
support up to de minimis
levels (see entries above)
70 WTO Agreements Series
SCM subsidies and countervailing
measures (SCM Agreement)
SPS sanitary and phytosanitary
(measures) i.e. for food safety
and animal and plant health
SSG special safeguard (in
agriculture), allowing tariffs
to be raised temporarily
according to formulas, without
the need to prove injury, in
response to import surges or
price falls. Only available on
some products.
schedule In general, a WTO member’s
list of commitments on
market access (bound tariff
rates, access to services
markets). Goods schedules
can include commitments
on agricultural subsidies
and domestic support.
Services commitments
include bindings on national
treatment. Also: “schedule of
concessions”, “schedule of
specific commitments”
TBT technical barriers to trade
(TBT Agreement) —
standards, regulations and
labelling requirements
TQ tariff quota, where tariffs
inside the quota are lower
than on quantities outside
TRQ tariff rate quota, another
name for tariff quota
UMRs usual marketing requirements,
a system in FAO principles for
food aid
WTO The World Trade
Organization, established as
the successor to the GATT on
1 January 1995
 Legal texts on agriculture

Agreement on Agriculture
Members,

Having decided to establish a basis for initiating a process of reform of trade in agriculture in
line with the objectives of the negotiations as set out in the Punta del Este Declaration;

Recalling that their long-term objective as agreed at the Mid-Term Review of the Uruguay
Round “is to establish a fair and market-oriented agricultural trading system and that a
reform process should be initiated through the negotiation of commitments on support and
protection and through the establishment of strengthened and more operationally effective
GATT rules and disciplines”;

Recalling further that “the above-mentioned long-term objective is to provide for substantial
progressive reductions in agricultural support and protection sustained over an agreed period
of time, resulting in correcting and preventing restrictions and distortions in world agricultural
markets”;

Committed to achieving specific binding commitments in each of the following areas: market
access; domestic support; export competition; and to reaching an agreement on sanitary and
phytosanitary issues;

Having agreed that in implementing their commitments on market access, developed country
Members would take fully into account the particular needs and conditions of developing
country Members by providing for a greater improvement of opportunities and terms of
access for agricultural products of particular interest to these Members, including the fullest
liberalization of trade in tropical agricultural products as agreed at the Mid-Term Review, and
for products of particular importance to the diversification of production from the growing of
illicit narcotic crops;

Noting that commitments under the reform programme should be made in an equitable way
among all Members, having regard to non-trade concerns, including food security and the
need to protect the environment; having regard to the agreement that special and differential
treatment for developing countries is an integral element of the negotiations, and taking into
account the possible negative effects of the implementation of the reform programme on
least-developed and net food-importing developing countries;

Hereby agree as follows:

Agriculture 71
 Part I

Article 1
Definition of Terms

In this Agreement, unless the context otherwise requires:

(a) “Aggregate Measurement of Support” and “AMS” mean the annual level of
support, expressed in monetary terms, provided for an agricultural product
in favour of the producers of the basic agricultural product or non-product-
specific support provided in favour of agricultural producers in general,
other than support provided under programmes that qualify as exempt from
reduction under Annex 2 to this Agreement, which is:

(i) with respect to support provided during the base period, specified in
the relevant tables of supporting material incorporated by reference in
Part IV of a Member’s Schedule; and

(ii) with respect to support provided during any year of the implementation
period and thereafter, calculated in accordance with the provisions of
Annex 3 of this Agreement and taking into account the constituent
data and methodology used in the tables of supporting material
incorporated by reference in Part IV of the Member’s Schedule;

(b) “basic agricultural product” in relation to domestic support commitments

is defined as the product as close as practicable to the point of first sale as
specified in a Member’s Schedule and in the related supporting material;

(c) “budgetary outlays” or “outlays” includes revenue foregone;

(d) “Equivalent Measurement of Support” means the annual level of support,

expressed in monetary terms, provided to producers of a basic agricultural
product through the application of one or more measures, the calculation of
which in accordance with the AMS methodology is impracticable, other than
support provided under programmes that qualify as exempt from reduction
under Annex 2 to this Agreement, and which is:

(i) with respect to support provided during the base period, specified in
the relevant tables of supporting material incorporated by reference in
Part IV of a Member’s Schedule; and

72 WTO Agreements Series

 (ii) with respect to support provided during any year of the implementation
period and thereafter, calculated in accordance with the provisions of
Annex 4 of this Agreement and taking into account the constituent
data and methodology used in the tables of supporting material
incorporated by reference in Part IV of the Member’s Schedule;

(e) “export subsidies” refers to subsidies contingent upon export performance,

including the export subsidies listed in Article 9 of this Agreement;

(f) “implementation period” means the six-year period commencing in the year
1995, except that, for the purposes of Article 13, it means the nine-year period
commencing in 1995;

(g) “market access concessions” includes all market access commitments

undertaken pursuant to this Agreement;

(h) “Total Aggregate Measurement of Support” and “Total AMS” mean the sum of
all domestic support provided in favour of agricultural producers, calculated
as the sum of all aggregate measurements of support for basic agricultural
products, all non-product-specific aggregate measurements of support and all
equivalent measurements of support for agricultural products, and which is:

(i) with respect to support provided during the base period (i.e. the “Base
Total AMS”) and the maximum support permitted to be provided during
any year of the implementation period or thereafter (i.e. the “Annual
and Final Bound Commitment Levels”), as specified in Part IV of a
Member’s Schedule; and

(ii) with respect to the level of support actually provided during any year
of the implementation period and thereafter (i.e. the “Current Total
AMS”), calculated in accordance with the provisions of this Agreement,
including Article  6, and with the constituent data and methodology
used in the tables of supporting material incorporated by reference in
Part IV of the Member’s Schedule;

(i) “year” in paragraph (f) above and in relation to the specific commitments of
a Member refers to the calendar, financial or marketing year specified in the
Schedule relating to that Member.

Agriculture 73
 Article 2
Product Coverage

This Agreement applies to the products listed in Annex 1 to this Agreement, hereinafter
referred to as agricultural products.

Part II

Article 3
Incorporation of Concessions and Commitments

1. The domestic support and export subsidy commitments in Part IV of each Member’s
Schedule constitute commitments limiting subsidization and are hereby made an
integral part of GATT 1994.

2. Subject to the provisions of Article  6, a Member shall not provide support in favour
of domestic producers in excess of the commitment levels specified in Section  I of
Part IV of its Schedule.

3. Subject to the provisions of paragraphs 2(b) and  4 of Article  9, a Member shall not
provide export subsidies listed in paragraph 1 of Article 9 in respect of the agricultural
products or groups of products specified in Section  II of Part  IV of its Schedule in
excess of the budgetary outlay and quantity commitment levels specified therein and
shall not provide such subsidies in respect of any agricultural product not specified in
that Section of its Schedule.

Part III

Article 4
Market Access

1. Market access concessions contained in Schedules relate to bindings and reductions

of tariffs, and to other market access commitments as specified therein.

74 WTO Agreements Series

2. Members shall not maintain, resort to, or revert to any measures of the kind which
have been required to be converted into ordinary customs duties1, except as otherwise
provided for in Article 5 and Annex 5.

Article 5
Special Safeguard Provisions

1. Notwithstanding the provisions of paragraph 1(b) of Article II of GATT 1994, any

Member may take recourse to the provisions of paragraphs 4 and 5 below in connection
with the importation of an agricultural product, in respect of which measures referred
to in paragraph 2 of Article 4 of this Agreement have been converted into an ordinary
customs duty and which is designated in its Schedule with the symbol “SSG” as being
the subject of a concession in respect of which the provisions of this Article may be
invoked, if:

(a) the volume of imports of that product entering the customs territory of the
Member granting the concession during any year exceeds a trigger level which
relates to the existing market access opportunity as set out in paragraph 4; or,
but not concurrently:

(b) the price at which imports of that product may enter the customs territory of the
Member granting the concession, as determined on the basis of the c.i.f. import
price of the shipment concerned expressed in terms of its domestic currency,
falls below a trigger price equal to the average 1986 to 1988 reference price2
for the product concerned.

2. Imports under current and minimum access commitments established as part of

a concession referred to in paragraph 1 above shall be counted for the purpose of
determining the volume of imports required for invoking the provisions of subparagraph
1(a) and paragraph 4, but imports under such commitments shall not be affected
by any additional duty imposed under either subparagraph 1(a) and paragraph 4 or
subparagraph 1(b) and paragraph 5 below.

1 These measures include quantitative import restrictions, variable import levies, minimum import prices,
discretionary import licensing, non-tariff measures maintained through state-trading enterprises, voluntary
export restraints, and similar border measures other than ordinary customs duties, whether or not the
measures are maintained under country-specific derogations from the provisions of GATT 1947, but not
measures maintained under balance-of-payments provisions or under other general, non-agriculture-specific
provisions of GATT 1994 or of the other Multilateral Trade Agreements in Annex 1A to the WTO Agreement.
2 The reference price used to invoke the provisions of this subparagraph shall, in general, be the average
c.i.f. unit value of the product concerned, or otherwise shall be an appropriate price in terms of the quality of
the product and its stage of processing. It shall, following its initial use, be publicly specified and available to
the extent necessary to allow other Members to assess the additional duty that may be levied.

Agriculture 75
 3. Any supplies of the product in question which were en route on the basis of a contract
settled before the additional duty is imposed under subparagraph 1(a) and paragraph
4 shall be exempted from any such additional duty, provided that they may be counted
in the volume of imports of the product in question during the following year for the
purposes of triggering the provisions of subparagraph 1(a) in that year.

4. Any additional duty imposed under subparagraph 1(a) shall only be maintained until the
end of the year in which it has been imposed, and may only be levied at a level which
shall not exceed one third of the level of the ordinary customs duty in effect in the year
in which the action is taken. The trigger level shall be set according to the following
schedule based on market access opportunities defined as imports as a percentage of
the corresponding domestic consumption3 during the three preceding years for which
data are available:

(a) where such market access opportunities for a product are less than or equal to
10 per cent, the base trigger level shall equal 125 per cent;

(b) where such market access opportunities for a product are greater than 10 per
cent but less than or equal to 30 per cent, the base trigger level shall equal
110 per cent;

(c) where such market access opportunities for a product are greater than 30 per
cent, the base trigger level shall equal 105 per cent.

In all cases the additional duty may be imposed in any year where the absolute volume
of imports of the product concerned entering the customs territory of the Member
granting the concession exceeds the sum of (x) the base trigger level set out above
multiplied by the average quantity of imports during the three preceding years for which
data are available and (y) the absolute volume change in domestic consumption of the
product concerned in the most recent year for which data are available compared to
the preceding year, provided that the trigger level shall not be less than 105 per cent of
the average quantity of imports in (x) above.

5. The additional duty imposed under subparagraph 1(b) shall be set according to the
following schedule:

(a) if the difference between the c.i.f. import price of the shipment expressed in
terms of the domestic currency (hereinafter referred to as the “import price”)
and the trigger price as defined under that subparagraph is less than or equal
to 10 per cent of the trigger price, no additional duty shall be imposed;

(b) if the difference between the import price and the trigger price (hereinafter
referred to as the “difference”) is greater than 10  per  cent but less than or

3 Where domestic consumption is not taken into account, the base trigger level under subparagraph 4(a)
shall apply.

76 WTO Agreements Series

 equal to 40 per cent of the trigger price, the additional duty shall equal 30 per
cent of the amount by which the difference exceeds 10 per cent;

(c) if the difference is greater than 40  per  cent but less than or equal to
60 per cent of the trigger price, the additional duty shall equal 50 per cent of
the amount by which the difference exceeds 40 per cent, plus the additional
duty allowed under (b);

(d) if the difference is greater than 60 per cent but less than or equal to 75 per
cent, the additional duty shall equal 70 per cent of the amount by which the
difference exceeds 60 per cent of the trigger price, plus the additional duties
allowed under (b) and (c);

(e) if the difference is greater than 75 per cent of the trigger price, the additional
duty shall equal 90 per cent of the amount by which the difference exceeds
75 per cent, plus the additional duties allowed under (b), (c) and (d).

6. For perishable and seasonal products, the conditions set out above shall be applied in
such a manner as to take account of the specific characteristics of such products. In
particular, shorter time periods under subparagraph 1(a) and paragraph 4 may be used
in reference to the corresponding periods in the base period and different reference
prices for different periods may be used under subparagraph 1(b).

7. The operation of the special safeguard shall be carried out in a transparent manner.
Any Member taking action under subparagraph 1(a) above shall give notice in writing,
including relevant data, to the Committee on Agriculture as far in advance as may be
practicable and in any event within 10 days of the implementation of such action. In
cases where changes in consumption volumes must be allocated to individual tariff
lines subject to action under paragraph 4, relevant data shall include the information
and methods used to allocate these changes. A Member taking action under
paragraph 4 shall afford any interested Members the opportunity to consult with it
in respect of the conditions of application of such action. Any Member taking action
under subparagraph 1(b) above shall give notice in writing, including relevant data,
to the Committee on Agriculture within 10  days of the implementation of the first
such action or, for perishable and seasonal products, the first action in any period.
Members undertake, as far as practicable, not to take recourse to the provisions
of subparagraph  1(b) where the volume of imports of the products concerned are
declining. In either case a Member taking such action shall afford any interested
Members the opportunity to consult with it in respect of the conditions of application of
such action.

8. Where measures are taken in conformity with paragraphs 1 through 7 above, Members
undertake not to have recourse, in respect of such measures, to the provisions of
paragraphs 1(a) and 3 of Article XIX of GATT 1994 or paragraph 2 of Article 8 of the
Agreement on Safeguards.

Agriculture 77
 9. The provisions of this Article shall remain in force for the duration of the reform process
as determined under Article 20.

Part IV

Article 6
Domestic Support Commitments

1. The domestic support reduction commitments of each Member contained in Part IV of

its Schedule shall apply to all of its domestic support measures in favour of agricultural
producers with the exception of domestic measures which are not subject to reduction
in terms of the criteria set out in this Article and in Annex 2 to this Agreement. The
commitments are expressed in terms of Total Aggregate Measurement of Support and
“Annual and Final Bound Commitment Levels”.

2. In accordance with the Mid-Term Review Agreement that government measures of

assistance, whether direct or indirect, to encourage agricultural and rural development
are an integral part of the development programmes of developing countries,
investment subsidies which are generally available to agriculture in developing
country Members and agricultural input subsidies generally available to low-income
or resource-poor producers in developing country Members shall be exempt from
domestic support reduction commitments that would otherwise be applicable to such
measures, as shall domestic support to producers in developing country Members to
encourage diversification from growing illicit narcotic crops. Domestic support meeting
the criteria of this paragraph shall not be required to be included in a Member’s
calculation of its Current Total AMS.

3. A Member shall be considered to be in compliance with its domestic support reduction

commitments in any year in which its domestic support in favour of agricultural
producers expressed in terms of Current Total AMS does not exceed the corresponding
annual or final bound commitment level specified in Part IV of the Member’s Schedule.

4. (a) A Member shall not be required to include in the calculation of its Current Total
AMS and shall not be required to reduce:

(i) product-specific domestic support which would otherwise be required

to be included in a Member’s calculation of its Current AMS where
such support does not exceed 5 per cent of that Member’s total value
of production of a basic agricultural product during the relevant year;
and

78 WTO Agreements Series

 (ii) non-product-specific domestic support which would otherwise be
required to be included in a Member’s calculation of its Current AMS
where such support does not exceed 5  per  cent of the value of that
Member’s total agricultural production.

(b) For developing country Members, the de minimis percentage under this
paragraph shall be 10 per cent.

5. (a) Direct payments under production-limiting programmes shall not be subject to

the commitment to reduce domestic support if:

(i) such payments are based on fixed area and yields; or

(ii) such payments are made on 85 per cent or less of the base level of
production; or

(iii) livestock payments are made on a fixed number of head.

(b) The exemption from the reduction commitment for direct payments meeting
the above criteria shall be reflected by the exclusion of the value of those
direct payments in a Member’s calculation of its Current Total AMS.

Article 7
General Disciplines on Domestic Support

1. Each Member shall ensure that any domestic support measures in favour of agricultural
producers which are not subject to reduction commitments because they qualify
under the criteria set out in Annex 2 to this Agreement are maintained in conformity
therewith.

2. (a) Any domestic support measure in favour of agricultural producers, including

any modification to such measure, and any measure that is subsequently
introduced that cannot be shown to satisfy the criteria in Annex  2 to this
Agreement or to be exempt from reduction by reason of any other provision
of this Agreement shall be included in the Member’s calculation of its Current
Total AMS.

(b) Where no Total AMS commitment exists in Part IV of a Member’s Schedule,

the Member shall not provide support to agricultural producers in excess of the
relevant de minimis level set out in paragraph 4 of Article 6.

Agriculture 79
 Part V

Article 8
Export Competition Commitments

Each Member undertakes not to provide export subsidies otherwise than in conformity
with this Agreement and with the commitments as specified in that Member’s
Schedule.

Article 9
Export Subsidy Commitments

1. The following export subsidies are subject to reduction commitments under this
Agreement:

(a) the provision by governments or their agencies of direct subsidies, including

payments-in-kind, to a firm, to an industry, to producers of an agricultural
product, to a cooperative or other association of such producers, or to a
marketing board, contingent on export performance;

(b) the sale or disposal for export by governments or their agencies of non-
commercial stocks of agricultural products at a price lower than the comparable
price charged for the like product to buyers in the domestic market;

(c) payments on the export of an agricultural product that are financed by virtue of
governmental action, whether or not a charge on the public account is involved,
including payments that are financed from the proceeds of a levy imposed on
the agricultural product concerned or on an agricultural product from which
the exported product is derived;

(d) the provision of subsidies to reduce the costs of marketing exports of

agricultural products (other than widely available export promotion and
advisory services) including handling, upgrading and other processing costs,
and the costs of international transport and freight;

(e) internal transport and freight charges on export shipments, provided or

mandated by governments, on terms more favourable than for domestic
shipments;

80 WTO Agreements Series

 (f) subsidies on agricultural products contingent on their incorporation in exported
products.

2. (a) Except as provided in subparagraph (b), the export subsidy commitment

levels for each year of the implementation period, as specified in a Member’s
Schedule, represent with respect to the export subsidies listed in paragraph 1
of this Article:

(i) in the case of budgetary outlay reduction commitments, the maximum

level of expenditure for such subsidies that may be allocated or
incurred in that year in respect of the agricultural product, or group of
products, concerned; and

(ii) in the case of export quantity reduction commitments, the maximum

quantity of an agricultural product, or group of products, in respect of
which such export subsidies may be granted in that year.

(b) In any of the second through fifth years of the implementation period, a
Member may provide export subsidies listed in paragraph 1 above in a given
year in excess of the corresponding annual commitment levels in respect
of the products or groups of products specified in Part IV of the Member’s
Schedule, provided that:

(i) the cumulative amounts of budgetary outlays for such subsidies,

from the beginning of the implementation period through the year
in question, does not exceed the cumulative amounts that would
have resulted from full compliance with the relevant annual outlay
commitment levels specified in the Member’s Schedule by more than 3
per cent of the base period level of such budgetary outlays;

(ii) the cumulative quantities exported with the benefit of such export
subsidies, from the beginning of the implementation period through the
year in question, does not exceed the cumulative quantities that would
have resulted from full compliance with the relevant annual quantity
commitment levels specified in the Member’s Schedule by more than
1.75 per cent of the base period quantities;

(iii) the total cumulative amounts of budgetary outlays for such export
subsidies and the quantities benefiting from such export subsidies
over the entire implementation period are no greater than the totals
that would have resulted from full compliance with the relevant annual
commitment levels specified in the Member’s Schedule; and

Agriculture 81
 (iv) the Member’s budgetary outlays for export subsidies and the quantities
benefiting from such subsidies, at the conclusion of the implementation
period, are no greater than 64 per cent and 79 per cent of the 1986-
1990 base period levels, respectively. For developing country Members
these percentages shall be 76 and 86 per cent, respectively.

3. Commitments relating to limitations on the extension of the scope of export

subsidization are as specified in Schedules.

4. During the implementation period, developing country Members shall not be required
to undertake commitments in respect of the export subsidies listed in subparagraphs
(d) and (e) of paragraph 1 above, provided that these are not applied in a manner that
would circumvent reduction commitments.

Article 10
Prevention of Circumvention of Export Subsidy Commitments

1. Export subsidies not listed in paragraph 1 of Article 9 shall not be applied in a manner
which results in, or which threatens to lead to, circumvention of export subsidy
commitments; nor shall non-commercial transactions be used to circumvent such
commitments.

2. Members undertake to work toward the development of internationally agreed disciplines

to govern the provision of export credits, export credit guarantees or insurance
programmes and, after agreement on such disciplines, to provide export credits, export
credit guarantees or insurance programmes only in conformity therewith.

3. Any Member which claims that any quantity exported in excess of a reduction
commitment level is not subsidized must establish that no export subsidy, whether
listed in Article  9 or not, has been granted in respect of the quantity of exports in
question.

4. Members donors of international food aid shall ensure:

(a) that the provision of international food aid is not tied directly or indirectly to
commercial exports of agricultural products to recipient countries;

(b) that international food aid transactions, including bilateral food aid which
is monetized, shall be carried out in accordance with the FAO “Principles of
Surplus Disposal and Consultative Obligations”, including, where appropriate,
the system of Usual Marketing Requirements (UMRs); and

82 WTO Agreements Series

 (c) that such aid shall be provided to the extent possible in fully grant form or on
terms no less concessional than those provided for in Article IV of the Food
Aid Convention 1986.

Article 11
Incorporated Products

In no case may the per-unit subsidy paid on an incorporated agricultural primary

product exceed the per-unit export subsidy that would be payable on exports of the
primary product as such.

Part VI

Article 12
Disciplines on Export Prohibitions and Restrictions

1. Where any Member institutes any new export prohibition or restriction on foodstuffs in
accordance with paragraph 2(a) of Article XI of GATT 1994, the Member shall observe
the following provisions:

(a) the Member instituting the export prohibition or restriction shall give due
consideration to the effects of such prohibition or restriction on importing
Members’ food security;

(b) before any Member institutes an export prohibition or restriction, it shall

give notice in writing, as far in advance as practicable, to the Committee on
Agriculture comprising such information as the nature and the duration of
such measure, and shall consult, upon request, with any other Member having
a substantial interest as an importer with respect to any matter related to
the measure in question. The Member instituting such export prohibition
or restriction shall provide, upon request, such a Member with necessary
information.

2. The provisions of this Article shall not apply to any developing country Member, unless
the measure is taken by a developing country Member which is a net-food exporter of
the specific foodstuff concerned.

Agriculture 83
 Part VII

Article 13
Due Restraint

During the implementation period, notwithstanding the provisions of GATT 1994 and
the Agreement on Subsidies and Countervailing Measures (referred to in this Article
as the “Subsidies Agreement”):

(a) domestic support measures that conform fully to the provisions of Annex 2 to
this Agreement shall be:

(i) non-actionable subsidies for purposes of countervailing duties4;

(ii) exempt from actions based on Article XVI of GATT 1994 and Part III of
the Subsidies Agreement; and

(iii) exempt from actions based on non-violation nullification or impairment

of the benefits of tariff concessions accruing to another Member under
Article II of GATT 1994, in the sense of paragraph 1(b) of Article XXIII
of GATT 1994;

(b) domestic support measures that conform fully to the provisions of Article 6 of
this Agreement including direct payments that conform to the requirements
of paragraph 5 thereof, as reflected in each Member’s Schedule, as well as
domestic support within de minimis levels and in conformity with paragraph 2
of Article 6, shall be:

(i) exempt from the imposition of countervailing duties unless a

determination of injury or threat thereof is made in accordance with
Article VI of GATT 1994 and Part  V of the Subsidies Agreement,
and due restraint shall be shown in initiating any countervailing duty
investigations;

(ii) exempt from actions based on paragraph 1 of Article  XVI of GATT

1994 or Articles  5 and  6 of the Subsidies Agreement, provided that
such measures do not grant support to a specific commodity in excess
of that decided during the 1992 marketing year; and

4 “Countervailing duties” where referred to in this Article are those covered by Article VI of GATT 1994
and Part V of the Agreement on Subsidies and Countervailing Measures.

84 WTO Agreements Series

 (iii) exempt from actions based on non-violation nullification or impairment
of the benefits of tariff concessions accruing to another Member under
Article II of GATT 1994, in the sense of paragraph 1(b) of Article XXIII
of GATT 1994, provided that such measures do not grant support
to a specific commodity in excess of that decided during the 1992
marketing year;

(c) export subsidies that conform fully to the provisions of Part  V of this
Agreement, as reflected in each Member’s Schedule, shall be:

(i) subject to countervailing duties only upon a determination of injury

or threat thereof based on volume, effect on prices, or consequent
impact in accordance with Article VI of GATT 1994 and Part V of the
Subsidies Agreement, and due restraint shall be shown in initiating any
countervailing duty investigations; and

(ii) exempt from actions based on Article XVI of GATT 1994 or Articles 3,

5 and 6 of the Subsidies Agreement.

Part VIII

Article 14
Sanitary and Phytosanitary Measures

Members agree to give effect to the Agreement on the Application of Sanitary and
Phytosanitary Measures.

Part IX

Article 15
Special and Differential Treatment

1. In keeping with the recognition that differential and more favourable treatment
for developing country Members is an integral part of the negotiation, special and
differential treatment in respect of commitments shall be provided as set out in the

Agriculture 85
 relevant provisions of this Agreement and embodied in the Schedules of concessions
and commitments.

2. Developing country Members shall have the flexibility to implement reduction

commitments over a period of up to 10 years. Least-developed country Members shall
not be required to undertake reduction commitments.

Part X

Article 16
Least-Developed and Net Food-Importing Developing Countries

1. Developed country Members shall take such action as is provided for within the
framework of the Decision on Measures Concerning the Possible Negative Effects
of the Reform Programme on Least-Developed and Net Food-Importing Developing
Countries.

2. The Committee on Agriculture shall monitor, as appropriate, the follow-up to this

Decision.

Part XI

Article 17
Committee on Agriculture

A Committee on Agriculture is hereby established.

86 WTO Agreements Series

Article 18
Review of the Implementation of Commitments

1. Progress in the implementation of commitments negotiated under the Uruguay Round

reform programme shall be reviewed by the Committee on Agriculture.

2. The review process shall be undertaken on the basis of notifications submitted by

Members in relation to such matters and at such intervals as shall be determined, as
well as on the basis of such documentation as the Secretariat may be requested to
prepare in order to facilitate the review process.

3. In addition to the notifications to be submitted under paragraph 2, any new domestic

support measure, or modification of an existing measure, for which exemption from
reduction is claimed shall be notified promptly. This notification shall contain details
of the new or modified measure and its conformity with the agreed criteria as set out
either in Article 6 or in Annex 2.

4. In the review process Members shall give due consideration to the influence of
excessive rates of inflation on the ability of any Member to abide by its domestic
support commitments.

5. Members agree to consult annually in the Committee on Agriculture with respect to

their participation in the normal growth of world trade in agricultural products within
the framework of the commitments on export subsidies under this Agreement.

6. The review process shall provide an opportunity for Members to raise any matter
relevant to the implementation of commitments under the reform programme as set
out in this Agreement.

7. Any Member may bring to the attention of the Committee on Agriculture any measure
which it considers ought to have been notified by another Member.

Article 19
Consultation and Dispute Settlement

The provisions of Articles XXII and XXIII of GATT 1994, as elaborated and applied by
the Dispute Settlement Understanding, shall apply to consultations and the settlement
of disputes under this Agreement.

Agriculture 87
 Part XII

Article 20
Continuation of the Reform Process

Recognizing that the long-term objective of substantial progressive reductions

in support and protection resulting in fundamental reform is an ongoing process,
Members agree that negotiations for continuing the process will be initiated one year
before the end of the implementation period, taking into account:

(a) the experience to that date from implementing the reduction commitments;

(b) the effects of the reduction commitments on world trade in agriculture;

(c) non-trade concerns, special and differential treatment to developing country

Members, and the objective to establish a fair and market-oriented agricultural
trading system, and the other objectives and concerns mentioned in the
preamble to this Agreement; and

(d) what further commitments are necessary to achieve the above mentioned
long-term objectives.

Part XIII

Article 21
Final Provisions

1. The provisions of GATT 1994 and of other Multilateral Trade Agreements in Annex 1A
to the WTO Agreement shall apply subject to the provisions of this Agreement.

2. The Annexes to this Agreement are hereby made an integral part of this Agreement.

88 WTO Agreements Series

ANNEX 1
PRODUCT COVERAGE
1. This Agreement shall cover the following products:

HS Chapters 1 to 24 less fish and fish products, plus*

(i) HS Code 2905.43 (mannitol)

(ii) HS Code 2905.44 (sorbitol)
HS Heading 33.01 (essential oils)
HS Headings 35.01 to 35.05 (albuminoidal substances, modified
starches, glues)
HS Code 3809.10 (finishing agents)
HS Code 3823.60 (sorbitol n.e.p.)
HS Headings 41.01 to 41.03 (hides and skins)
HS Heading 43.01 (raw furskins)
HS Headings 50.01 to 50.03 (raw silk and silk waste)
HS Headings 51.01 to 51.03 (wool and animal hair)
HS Headings 52.01 to 52.03 (raw cotton, waste and cotton carded or
combed)
HS Heading 53.01 (raw flax)
HS Heading 53.02 (raw hemp)

2. The foregoing shall not limit the product coverage of the Agreement on the Application
of Sanitary and Phytosanitary Measures.

*The product descriptions in round brackets are not necessarily exhaustive.

Agriculture 89
 ANNEX 2
DOMESTIC SUPPORT: THE BASIS FOR EXEMPTION
FROM THE REDUCTION COMMITMENTS
1. Domestic support measures for which exemption from the reduction commitments is
claimed shall meet the fundamental requirement that they have no, or at most minimal,
trade-distorting effects or effects on production. Accordingly, all measures for which
exemption is claimed shall conform to the following basic criteria:

(a) the support in question shall be provided through a publicly-funded government

programme (including government revenue foregone) not involving transfers
from consumers; and,

(b) the support in question shall not have the effect of providing price support to
producers;

plus policy-specific criteria and conditions as set out below.

Government Service Programmes

2. General services

Policies in this category involve expenditures (or revenue foregone) in relation to

programmes which provide services or benefits to agriculture or the rural community.
They shall not involve direct payments to producers or processors. Such programmes,
which include but are not restricted to the following list, shall meet the general criteria
in paragraph 1 above and policy-specific conditions where set out below:

(a) research, including general research, research in connection with

environmental programmes, and research programmes relating to particular
products;

(b) pest and disease control, including general and product-specific pest and
disease control measures, such as early-warning systems, quarantine and
eradication;

(c) training services, including both general and specialist training facilities;

(d) extension and advisory services, including the provision of means to facilitate
the transfer of information and the results of research to producers and
consumers;

90 WTO Agreements Series

 (e) inspection services, including general inspection services and the inspection
of particular products for health, safety, grading or standardization purposes;

(f) marketing and promotion services, including market information, advice

and promotion relating to particular products but excluding expenditure for
unspecified purposes that could be used by sellers to reduce their selling price
or confer a direct economic benefit to purchasers; and

(g) infrastructural services, including: electricity reticulation, roads and other

means of transport, market and port facilities, water supply facilities, dams and
drainage schemes, and infrastructural works associated with environmental
programmes. In all cases the expenditure shall be directed to the provision or
construction of capital works only, and shall exclude the subsidized provision
of on-farm facilities other than for the reticulation of generally available public
utilities. It shall not include subsidies to inputs or operating costs, or preferential
user charges.

3. Public stockholding for food security purposes5

Expenditures (or revenue foregone) in relation to the accumulation and holding of

stocks of products which form an integral part of a food security programme identified
in national legislation. This may include government aid to private storage of products
as part of such a programme.

The volume and accumulation of such stocks shall correspond to predetermined

targets related solely to food security. The process of stock accumulation and
disposal shall be financially transparent. Food purchases by the government
shall be made at current market prices and sales from food security stocks
shall be made at no less than the current domestic market price for the product
and quality in question.

4. Domestic food aid6

Expenditures (or revenue foregone) in relation to the provision of domestic food aid to
sections of the population in need.

5 For the purposes of paragraph  3 of this Annex, governmental stockholding programmes for food
security purposes in developing countries whose operation is transparent and conducted in accordance with
officially published objective criteria or guidelines shall be considered to be in conformity with the provisions
of this paragraph, including programmes under which stocks of foodstuffs for food security purposes are
acquired and released at administered prices, provided that the difference between the acquisition price and
the external reference price is accounted for in the AMS.
5 & 6 For the purposes of paragraphs 3 and 4 of this Annex, the provision of foodstuffs at subsidized
prices with the objective of meeting food requirements of urban and rural poor in developing countries
on a regular basis at reasonable prices shall be considered to be in conformity with the provisions of this
paragraph.

Agriculture 91
 Eligibility to receive the food aid shall be subject to clearly-defined criteria
related to nutritional objectives. Such aid shall be in the form of direct
provision of food to those concerned or the provision of means to allow eligible
recipients to buy food either at market or at subsidized prices. Food purchases
by the government shall be made at current market prices and the financing
and administration of the aid shall be transparent.

5. Direct payments to producers

Support provided through direct payments (or revenue foregone, including payments in
kind) to producers for which exemption from reduction commitments is claimed shall
meet the basic criteria set out in paragraph 1 above, plus specific criteria applying to
individual types of direct payment as set out in paragraphs 6 through 13 below. Where
exemption from reduction is claimed for any existing or new type of direct payment
other than those specified in paragraphs 6 through 13, it shall conform to criteria (b)
through (e) in paragraph 6, in addition to the general criteria set out in paragraph 1.

6. Decoupled income support

(a) Eligibility for such payments shall be determined by clearly-defined criteria

such as income, status as a producer or landowner, factor use or production
level in a defined and fixed base period.

(b) The amount of such payments in any given year shall not be related to, or based
on, the type or volume of production (including livestock units) undertaken by
the producer in any year after the base period.

(c) The amount of such payments in any given year shall not be related to, or
based on, the prices, domestic or international, applying to any production
undertaken in any year after the base period.

(d) The amount of such payments in any given year shall not be related to, or
based on, the factors of production employed in any year after the base period.

(e) No production shall be required in order to receive such payments.

7. Government financial participation in income insurance and income safety-net

programmes

(a) Eligibility for such payments shall be determined by an income loss, taking into
account only income derived from agriculture, which exceeds 30 per cent of
average gross income or the equivalent in net income terms (excluding any
payments from the same or similar schemes) in the preceding three-year period
or a three-year average based on the preceding five-year period, excluding the
highest and the lowest entry. Any producer meeting this condition shall be
eligible to receive the payments.

92 WTO Agreements Series

 (b) The amount of such payments shall compensate for less than 70  per cent
of the producer’s income loss in the year the producer becomes eligible to
receive this assistance.

(c) The amount of any such payments shall relate solely to income; it shall not
relate to the type or volume of production (including livestock units) undertaken
by the producer; or to the prices, domestic or international, applying to such
production; or to the factors of production employed.

(d) Where a producer receives in the same year payments under this paragraph
and under paragraph  8 (relief from natural disasters), the total of such
payments shall be less than 100 per cent of the producer’s total loss.

8. Payments (made either directly or by way of government financial participation in crop

insurance schemes) for relief from natural disasters

(a) Eligibility for such payments shall arise only following a formal recognition
by government authorities that a natural or like disaster (including disease
outbreaks, pest infestations, nuclear accidents, and war on the territory of the
Member concerned) has occurred or is occurring; and shall be determined by a
production loss which exceeds 30 per cent of the average of production in the
preceding three-year period or a three-year average based on the preceding
five-year period, excluding the highest and the lowest entry.

(b) Payments made following a disaster shall be applied only in respect of losses
of income, livestock (including payments in connection with the veterinary
treatment of animals), land or other production factors due to the natural
disaster in question.

(c) Payments shall compensate for not more than the total cost of replacing such
losses and shall not require or specify the type or quantity of future production.

(d) Payments made during a disaster shall not exceed the level required to prevent
or alleviate further loss as defined in criterion (b) above.

(e) Where a producer receives in the same year payments under this paragraph
and under paragraph 7 (income insurance and income safety-net programmes),
the total of such payments shall be less than 100 per cent of the producer’s
total loss.

9. Structural adjustment assistance provided through producer retirement programmes

(a) Eligibility for such payments shall be determined by reference to clearly

defined criteria in programmes designed to facilitate the retirement of persons
engaged in marketable agricultural production, or their movement to non-
agricultural activities.

Agriculture 93
 (b) Payments shall be conditional upon the total and permanent retirement of the
recipients from marketable agricultural production.

10. Structural adjustment assistance provided through resource retirement programmes

(a) Eligibility for such payments shall be determined by reference to clearly defined
criteria in programmes designed to remove land or other resources, including
livestock, from marketable agricultural production.

(b) Payments shall be conditional upon the retirement of land from marketable
agricultural production for a minimum of three years, and in the case of
livestock on its slaughter or definitive permanent disposal.

(c) Payments shall not require or specify any alternative use for such land or other
resources which involves the production of marketable agricultural products.

(d) Payments shall not be related to either the type or quantity of production or to
the prices, domestic or international, applying to production undertaken using
the land or other resources remaining in production.

11. Structural adjustment assistance provided through investment aids

(a) Eligibility for such payments shall be determined by reference to clearly-

defined criteria in government programmes designed to assist the financial
or physical restructuring of a producer’s operations in response to objectively
demonstrated structural disadvantages. Eligibility for such programmes
may also be based on a clearly-defined government programme for the
reprivatization of agricultural land.

(b) The amount of such payments in any given year shall not be related to, or based
on, the type or volume of production (including livestock units) undertaken by
the producer in any year after the base period other than as provided for under
criterion (e) below.

(c) The amount of such payments in any given year shall not be related to, or
based on, the prices, domestic or international, applying to any production
undertaken in any year after the base period.

(d) The payments shall be given only for the period of time necessary for the
realization of the investment in respect of which they are provided.

(e) The payments shall not mandate or in any way designate the agricultural
products to be produced by the recipients except to require them not to
produce a particular product.

94 WTO Agreements Series

 (f) The payments shall be limited to the amount required to compensate for the
structural disadvantage.

12. Payments under environmental programmes

(a) Eligibility for such payments shall be determined as part of a clearly-defined

government environmental or conservation programme and be dependent
on the fulfilment of specific conditions under the government programme,
including conditions related to production methods or inputs.

(b) The amount of payment shall be limited to the extra costs or loss of income
involved in complying with the government programme.

13. Payments under regional assistance programmes

(a) Eligibility for such payments shall be limited to producers in disadvantaged

regions. Each such region must be a clearly designated contiguous
geographical area with a definable economic and administrative identity,
considered as disadvantaged on the basis of neutral and objective criteria
clearly spelt out in law or regulation and indicating that the region’s difficulties
arise out of more than temporary circumstances.

(b) The amount of such payments in any given year shall not be related to, or based
on, the type or volume of production (including livestock units) undertaken
by the producer in any year after the base period other than to reduce that
production.

(c) The amount of such payments in any given year shall not be related to, or
based on, the prices, domestic or international, applying to any production
undertaken in any year after the base period.

(d) Payments shall be available only to producers in eligible regions, but generally
available to all producers within such regions.

(e) Where related to production factors, payments shall be made at a degressive

rate above a threshold level of the factor concerned.

(f) The payments shall be limited to the extra costs or loss of income involved in
undertaking agricultural production in the prescribed area.

Agriculture 95
 ANNEX 3
DOMESTIC SUPPORT: CALCULATION OF AGGREGATE
MEASUREMENT OF SUPPORT
1. Subject to the provisions of Article 6, an Aggregate Measurement of Support (AMS)
shall be calculated on a product-specific basis for each basic agricultural product
receiving market price support, non-exempt direct payments, or any other subsidy
not exempted from the reduction commitment (“other non-exempt policies”). Support
which is non-product specific shall be totalled into one non-product-specific AMS in
total monetary terms.

2. Subsidies under paragraph 1 shall include both budgetary outlays and revenue
foregone by governments or their agents.

3. Support at both the national and sub-national level shall be included.

4. Specific agricultural levies or fees paid by producers shall be deducted from the AMS.

5. The AMS calculated as outlined below for the base period shall constitute the base
level for the implementation of the reduction commitment on domestic support.

6. For each basic agricultural product, a specific AMS shall be established, expressed in
total monetary value terms.

7. The AMS shall be calculated as close as practicable to the point of first sale of the
basic agricultural product concerned. Measures directed at agricultural processors
shall be included to the extent that such measures benefit the producers of the basic
agricultural products.

8. Market price support: market price support shall be calculated using the gap between
a fixed external reference price and the applied administered price multiplied by the
quantity of production eligible to receive the applied administered price. Budgetary
payments made to maintain this gap, such as buying-in or storage costs, shall not be
included in the AMS.

9. The fixed external reference price shall be based on the years 1986 to 1988 and shall
generally be the average f.o.b. unit value for the basic agricultural product concerned
in a net exporting country and the average c.i.f. unit value for the basic agricultural
product concerned in a net importing country in the base period. The fixed reference
price may be adjusted for quality differences as necessary.

96 WTO Agreements Series

10. Non-exempt direct payments: non-exempt direct payments which are dependent on a
price gap shall be calculated either using the gap between the fixed reference price
and the applied administered price multiplied by the quantity of production eligible to
receive the administered price, or using budgetary outlays.

11. The fixed reference price shall be based on the years 1986 to 1988 and shall generally
be the actual price used for determining payment rates.

12. Non-exempt direct payments which are based on factors other than price shall be
measured using budgetary outlays.

13. Other non-exempt measures, including input subsidies and other measures such as
marketing-cost reduction measures: the value of such measures shall be measured
using government budgetary outlays or, where the use of budgetary outlays does
not reflect the full extent of the subsidy concerned, the basis for calculating the
subsidy shall be the gap between the price of the subsidized good or service and a
representative market price for a similar good or service multiplied by the quantity of
the good or service.

Agriculture 97
 ANNEX 4
DOMESTIC SUPPORT: CALCULATION OF EQUIVALENT
MEASUREMENT OF SUPPORT
1. Subject to the provisions of Article 6, equivalent measurements of support shall be
calculated in respect of all basic agricultural products where market price support as
defined in Annex 3 exists but for which calculation of this component of the AMS is
not practicable. For such products the base level for implementation of the domestic
support reduction commitments shall consist of a market price support component
expressed in terms of equivalent measurements of support under paragraph 2 below,
as well as any non-exempt direct payments and other non-exempt support, which shall
be evaluated as provided for under paragraph 3 below. Support at both national and
sub-national level shall be included.

2. The equivalent measurements of support provided for in paragraph  1 shall be

calculated on a product-specific basis for all basic agricultural products as close as
practicable to the point of first sale receiving market price support and for which the
calculation of the market price support component of the AMS is not practicable. For
those basic agricultural products, equivalent measurements of market price support
shall be made using the applied administered price and the quantity of production
eligible to receive that price or, where this is not practicable, on budgetary outlays used
to maintain the producer price.

3. Where basic agricultural products falling under paragraph  1 are the subject of non-
exempt direct payments or any other product-specific subsidy not exempted from the
reduction commitment, the basis for equivalent measurements of support concerning
these measures shall be calculations as for the corresponding AMS components
(specified in paragraphs 10 through 13 of Annex 3).

4. Equivalent measurements of support shall be calculated on the amount of subsidy as

close as practicable to the point of first sale of the basic agricultural product concerned.
Measures directed at agricultural processors shall be included to the extent that such
measures benefit the producers of the basic agricultural products. Specific agricultural
levies or fees paid by producers shall reduce the equivalent measurements of support
by a corresponding amount.

98 WTO Agreements Series

ANNEX 5
SPECIAL TREATMENT WITH RESPECT TO PARAGRAPH 2
OF ARTICLE 4
Section A

1. The provisions of paragraph 2 of Article 4 shall not apply with effect from the entry into
force of the WTO Agreement to any primary agricultural product and its worked and/or
prepared products (“designated products”) in respect of which the following conditions
are complied with (hereinafter referred to as “special treatment”):

(a) imports of the designated products comprised less than 3  per  cent of
corresponding domestic consumption in the base period 1986-1988 (“the
base period”);

(b) no export subsidies have been provided since the beginning of the base period
for the designated products;

(c) effective production-restricting measures are applied to the primary

agricultural product;

(d) such products are designated with the symbol “ST-Annex 5” in Section I-B of
Part I of a Member’s Schedule annexed to the Marrakesh Protocol, as being
subject to special treatment reflecting factors of non-trade concerns, such as
food security and environmental protection; and

(e) minimum access opportunities in respect of the designated products

correspond, as specified in Section  I-B of Part  I of the Schedule of the
Member concerned, to 4 per cent of base period domestic consumption of the
designated products from the beginning of the first year of the implementation
period and, thereafter, are increased by 0.8  per  cent of corresponding
domestic consumption in the base period per year for the remainder of the
implementation period.

2. At the beginning of any year of the implementation period a Member may cease to
apply special treatment in respect of the designated products by complying with the
provisions of paragraph 6. In such a case, the Member concerned shall maintain the
minimum access opportunities already in effect at such time and increase the minimum
access opportunities by 0.4  per  cent of corresponding domestic consumption in the
base period per year for the remainder of the implementation period. Thereafter, the
level of minimum access opportunities resulting from this formula in the final year
of the implementation period shall be maintained in the Schedule of the Member
concerned.

Agriculture 99
 3. Any negotiation on the question of whether there can be a continuation of the special
treatment as set out in paragraph 1 after the end of the implementation period shall
be completed within the time-frame of the implementation period itself as a part of the
negotiations set out in Article 20 of this Agreement, taking into account the factors of
non-trade concerns.

4. If it is agreed as a result of the negotiation referred to in paragraph 3 that a Member

may continue to apply the special treatment, such Member shall confer additional and
acceptable concessions as determined in that negotiation.

5. Where the special treatment is not to be continued at the end of the implementation
period, the Member concerned shall implement the provisions of paragraph 6. In such a
case, after the end of the implementation period the minimum access opportunities for
the designated products shall be maintained at the level of 8 per cent of corresponding
domestic consumption in the base period in the Schedule of the Member concerned.

6. Border measures other than ordinary customs duties maintained in respect of the
designated products shall become subject to the provisions of paragraph 2 of Article 4
with effect from the beginning of the year in which the special treatment ceases to
apply. Such products shall be subject to ordinary customs duties, which shall be bound
in the Schedule of the Member concerned and applied, from the beginning of the
year in which special treatment ceases and thereafter, at such rates as would have
been applicable had a reduction of at least 15  per  cent been implemented over the
implementation period in equal annual instalments. These duties shall be established
on the basis of tariff equivalents to be calculated in accordance with the guidelines
prescribed in the attachment hereto.

Section B

7. The provisions of paragraph 2 of Article 4 shall also not apply with effect from the
entry into force of the WTO Agreement to a primary agricultural product that is the
predominant staple in the traditional diet of a developing country Member and in
respect of which the following conditions, in addition to those specified in paragraph
1(a) through 1(d), as they apply to the products concerned, are complied with:

(a) minimum access opportunities in respect of the products concerned, as

specified in Section  I-B of Part  I of the Schedule of the developing country
Member concerned, correspond to 1  per  cent of base period domestic
consumption of the products concerned from the beginning of the first year
of the implementation period and are increased in equal annual instalments to
2 per cent of corresponding domestic consumption in the base period at the
beginning of the fifth year of the implementation period. From the beginning of
the sixth year of the implementation period, minimum access opportunities in
respect of the products concerned correspond to 2 per cent of corresponding
domestic consumption in the base period and are increased in equal annual

100 WTO Agreements Series

 instalments to 4 per cent of corresponding domestic consumption in the base
period until the beginning of the 10th year. Thereafter, the level of minimum
access opportunities resulting from this formula in the 10th year shall be
maintained in the Schedule of the developing country Member concerned;

(b) appropriate market access opportunities have been provided for in other
products under this Agreement.

8. Any negotiation on the question of whether there can be a continuation of the special
treatment as set out in paragraph 7 after the end of the 10th year following the
beginning of the implementation period shall be initiated and completed within the
time-frame of the 10th year itself following the beginning of the implementation period.

9. If it is agreed as a result of the negotiation referred to in paragraph 8 that a Member

may continue to apply the special treatment, such Member shall confer additional and
acceptable concessions as determined in that negotiation.

10. In the event that special treatment under paragraph 7 is not to be continued beyond
the 10th year following the beginning of the implementation period, the products
concerned shall be subject to ordinary customs duties, established on the basis of a
tariff equivalent to be calculated in accordance with the guidelines prescribed in the
attachment hereto, which shall be bound in the Schedule of the Member concerned.
In other respects, the provisions of paragraph 6 shall apply as modified by the relevant
special and differential treatment accorded to developing country Members under this
Agreement.

Attachment to Annex 5

Guidelines for the Calculation of Tariff Equivalents for the Specific

Purpose Specified in Paragraphs 6 and 10 of this Annex

1. The calculation of the tariff equivalents, whether expressed as ad valorem or specific

rates, shall be made using the actual difference between internal and external
prices in a transparent manner. Data used shall be for the years 1986 to 1988. Tariff
equivalents:

(a) shall primarily be established at the four-digit level of the HS;

(b) shall be established at the six-digit or a more detailed level of the HS wherever
appropriate;

(c) shall generally be established for worked and/or prepared products by

multiplying the specific tariff equivalent(s) for the primary agricultural product(s)
by the proportion(s) in value terms or in physical terms as appropriate of the
primary agricultural product(s) in the worked and/or prepared products, and

Agriculture 101
 take account, where necessary, of any additional elements currently providing
protection to industry.

2. External prices shall be, in general, actual average c.i.f. unit values for the importing
country. Where average c.i.f. unit values are not available or appropriate, external prices
shall be either:

(a) appropriate average c.i.f. unit values of a near country; or

(b) estimated from average f.o.b. unit values of (an) appropriate major exporter(s)
adjusted by adding an estimate of insurance, freight and other relevant costs to
the importing country.

3. The external prices shall generally be converted to domestic currencies using the
annual average market exchange rate for the same period as the price data.

4. The internal price shall generally be a representative wholesale price ruling in the
domestic market or an estimate of that price where adequate data is not available.

5. The initial tariff equivalents may be adjusted, where necessary, to take account of
differences in quality or variety using an appropriate coefficient.

6. Where a tariff equivalent resulting from these guidelines is negative or lower than the
current bound rate, the initial tariff equivalent may be established at the current bound
rate or on the basis of national offers for that product.

7. Where an adjustment is made to the level of a tariff equivalent which would have
resulted from the above guidelines, the Member concerned shall afford, on request, full
opportunities for consultation with a view to negotiating appropriate solutions.

102 WTO Agreements Series

 2013 Bali Package
on agriculture

General Services (Ministerial

Decision WT/MIN(13)/37)
MINISTERIAL DECISION OF 7 DECEMBER 2013

The Ministerial Conference,

Having regard to paragraph 1 of Article IX of the Marrakesh Agreement Establishing the

World Trade Organization;

Decides as follows:

Members recognize the contribution that General Services programmes can make to rural
development, food security and poverty alleviation, particularly in developing countries. This
includes a range of General Services programmes relating to land reform and rural livelihood
security that a number of developing countries have highlighted as particularly important
in advancing these objectives. Accordingly, Members note that, subject to Annex 2 of the
Agreement on Agriculture, the types of programmes listed below could be considered as
falling within the scope of the non-exhaustive list of general services programmes in Annex
2, paragraph 2 of the AoA.

General Services programmes related to land reform and rural livelihood security, such as:

i. land rehabilitation;

ii. soil conservation and resource management;

iii. drought management and flood control;

iv. rural employment programmes;

v. issuance of property titles; and

vi. farmer settlement programmes

in order to promote rural development and poverty alleviation.

Agriculture 103
 Public Stockholding for Food Security
Purposes (Ministerial Decision
WT/MIN(13)/38)
MINISTERIAL DECISION OF 7 DECEMBER 2013

The Ministerial Conference,

Having regard to paragraph 1 of Article IX of the Marrakesh Agreement Establishing the

World Trade Organization;

Decides as follows:

1. Members agree to put in place an interim mechanism as set out below, and to negotiate
on an agreement for a permanent solution1, for the issue of public stockholding for
food security purposes for adoption by the 11th Ministerial Conference.

2. In the interim, until a permanent solution is found, and provided that the conditions set
out below are met, Members shall refrain from challenging through the WTO Dispute
Settlement Mechanism, compliance of a developing Member with its obligations
under Articles 6.3 and 7.2 (b) of the Agreement on Agriculture (AoA) in relation to
support provided for traditional staple food crops2 in pursuance of public stockholding
programmes for food security purposes existing as of the date of this Decision, that
are consistent with the criteria of paragraph 3, footnote 5, and footnote 5&6 of Annex
2 to the AoA when the developing Member complies with the terms of this Decision. 3

NOTIFICATION AND TRANSPARENCY

3. A developing Member benefiting from this Decision must:

a. have notified the Committee on Agriculture that it is exceeding or is at risk

of exceeding either or both of its Aggregate Measurement of Support (AMS)
limits (the Member’s Bound Total AMS or the de minimis level) as result of its
programmes mentioned above;

1 The permanent solution will be applicable to all developing Members.

2 This term refers to primary agricultural products that are predominant staples in the traditional diet of a
developing Member.
3 This Decision does not preclude developing Members from introducing programmes of public
stockholding for food security purposes in accordance with the relevant provisions of the Agreement on
Agriculture.

104 WTO Agreements Series

 b. have fulfilled and continue to fulfil its domestic support notification
requirements under the AoA in accordance with document G/AG/2 of 30
June 1995, as specified in the Annex;

c. have provided, and continue to provide on an annual basis, additional

information by completing the template contained in the Annex, for each public
stockholding programme that it maintains for food security purposes; and

d. provide any additional relevant statistical information described in the Statistical

Appendix to the Annex as soon as possible after it becomes available, as well
as any information updating or correcting any information earlier submitted.

ANTI-CIRCUMVENTION/SAFEGUARDS
4. Any developing Member seeking coverage of programmes under paragraph 2 shall
ensure that stocks procured under such programmes do not distort trade or adversely
affect the food security of other Members.

5. This Decision shall not be used in a manner that results in an increase of the support
subject to the Member’s Bound Total AMS or the de minimis limits provided under
programmes other than those notified under paragraph 3.a.

CONSULTATIONS
6. A developing Member benefiting from this Decision shall upon request hold
consultations with other Members on the operation of its public stockholding
programmes notified under paragraph 3.a.

MONITORING
7. The Committee on Agriculture shall monitor the information submitted under this
Decision.

WORK PROGRAMME
8. Members agree to establish a work programme to be undertaken in the Committee
on Agriculture to pursue this issue with the aim of making recommendations for a
permanent solution. This work programme shall take into account Members’ existing
and future submissions.

Agriculture 105
 9. In the context of the broader post-Bali agenda, Members commit to the work
programme mentioned in the previous paragraph with the aim of concluding it no later
than the 11th Ministerial Conference.

10. The General Council shall report to the 10th Ministerial Conference for an evaluation
of the operation of this Decision, particularly on the progress made on the work
programme.

ANNEX
Template [Developing Member’s name]
General information

1. Factual information confirming that DS:1 notifications and relevant supporting tables
for the preceding 5 years are up-to-date (e.g. date and document details)
2. Details of the programme sufficient to identify food security objective and scale of
the programme, including:
a. Name of the programme
b. Traditional staple food crop(s) covered
c. Agency in charge of implementation
d. Relevant laws and regulations
e. Date of commencement of the programme
f. Officially published objective criteria or guidelines
3. Practical description of how the programme operates, including:
a. Provisions relating to the purchase of stocks, including the way the administered
acquisition price is determined
b. Provisions related to volume and accumulation of stocks, including any provisions
related to pre-determined targets and quantitative limits
c. Provisions related to the release of stocks, including the determination of the
release price and targeting (eligibility to receive procured stocks)
4. A description of any measures aimed at minimising production or trade distortive
effects of the programme
5. Statistical information (as per the Statistical Appendix below)
6. Any other information considered relevant, including website references

106 WTO Agreements Series

Statistical Appendix (per crop) (data for the latest three
years)

Unit [Year 1] [Year 2] [Year 3]

[Name of the crop]
a. Opening balance of stocks
b. Annual purchases under the
programme (value)
c. Annual purchases under the
programme (quantity)
d. Annual releases under the programme
(value)
e. Annual releases under the programme
(quantity)
f. Purchase prices

g. Release prices
h. End-year stocks
i. Total production (quantity)
j. Total production (value)
k. Information on population benefiting
from the release of this crop and
quantities released:
• Estimated number of beneficiaries
at national level and, if possible, at
sub-national level
• Quantity released to the beneficiaries
at the national level and, if possible,
at the sub-national level
• Other
l. In the case of government aid to
private storage, statistics on the
support granted and any updated
statistics
m. Total imports (value)
n. Total imports (quantity)
o. Total exports (value)
p. Total exports (quantity)

__________

Agriculture 107
 Post-Bali November 2014 (General
Council decision WT/L/939)
Public Stockholding for Food Security Purposes

DECISION OF 27 NOVEMBER 2014

The General Council,

Having regard to paragraph 1 of Article IX of the Marrakesh Agreement Establishing the

World Trade Organization (the “WTO Agreement”);

Conducting the functions of the Ministerial Conference in the interval between meetings
pursuant to paragraph 2 of Article IV of the WTO Agreement;

Recognizing the importance of public stockholding for food security purposes for developing
countries;

Noting the Ministerial Decision of 7 December 2013 on Public Stockholding for Food Security
Purposes (WT/MIN(13)/38-WT/L/913) dated 11 December 2013 (hereinafter referred to
as the “Bali Decision”);

Decides that:

1. Paragraph 2 of the Bali Decision shall be read as follows: Until a permanent solution1
is agreed and adopted, and provided that the conditions set out in paragraphs 3 to 6
of the Bali Decision are met, Members shall not challenge through the WTO Dispute
Settlement Mechanism, compliance of a developing Member with its obligations
under Articles 6.3 and 7.2(b) of the Agreement on Agriculture (AoA) in relation to
support provided for traditional staple food crops2 in pursuance of public stockholding
programmes for food security purposes existing as of the date of the Bali Decision,3
that are consistent with the criteria of paragraph 3, footnote 5, and footnote 5 and 6 of
Annex 2 to the AoA.

1 The permanent solution will be applicable to all developing Members.

2 This term refers to primary agricultural products that are predominant staples in the traditional diet of a
developing Member.
3 This Decision does not preclude developing Members from introducing programmes of public
stockholding for food security purposes in accordance with the relevant provisions of the Agreement on
Agriculture.

108 WTO Agreements Series

2. If a permanent solution for the issue of public stockholding for food security purposes
is not agreed and adopted by the 11th Ministerial Conference, the mechanism referred
to in paragraph 1 of the Bali Decision, as set out in paragraph 1 of this Decision, shall
continue to be in place until a permanent solution is agreed and adopted.

3. In accordance with paragraph 1.11 of the Bali Ministerial Declaration (WT/MIN(13)/

DEC) dated 11 December 2013, the negotiations on a permanent solution on the issue
of public stockholding for food security purposes shall be pursued on priority.

4. Members shall engage constructively to negotiate and make all concerted efforts to
agree and adopt a permanent solution on the issue of public stockholding for food
security purposes by 31 December 2015. In order to achieve such permanent solution,
the negotiations on this subject shall be held in the Committee on Agriculture in Special
Session (“CoA SS”), in dedicated sessions and in an accelerated time-frame, distinct
from the agriculture negotiations under the Doha Development Agenda (“DDA”). The
three pillars of the agriculture negotiations, pursuant to the DDA, will continue to
progress in the CoA SS.

5. The TNC/General Council shall regularly review the progress of these dedicated
sessions.

Agriculture 109
 Tariff quota administration
(Understanding on Tariff Rate
Quota Administration Provisions of
Agricultural Products, as Defined
in Article 2 of the Agreement on
Agriculture, Ministerial Decision
WT/MIN(13)/39)
MINISTERIAL DECISION OF 7 DECEMBER 2013

The Ministerial Conference,

Having regard to paragraph 1 of Article IX of the Marrakesh Agreement Establishing the

World Trade Organization;

Decides as follows:

Without prejudice to the overall conclusion of the Doha Round negotiations based on the
single undertaking and to the continuation of the reform process enshrined in Article 20 of
the Agreement on Agriculture and agreed in the Doha Development Agenda for negotiations
in agriculture1, Members hereby agree as follows:

1. Tariff quota administration of scheduled tariff quotas shall be deemed to be an

instance of “import licensing” within the meaning of the Uruguay Round Agreement
on Import Licensing Procedures and, accordingly, that Agreement shall apply in
full, subject to the Agreement on Agriculture and to the following more specific and
additional obligations.

2. As regards the matters referred to in paragraph 4(a) of Article 1 of that Agreement, as

these agricultural tariff quotas are negotiated and scheduled commitments, publication
of the relevant information shall be effected no later than 90 days prior to the opening
date of the tariff quota concerned. Where applications are involved, this shall also be
the minimum advance date for the opening of applications.

1 Paragraph 13 of the Doha Ministerial Declaration (Document WT/MIN(01)/DEC/1).

110 WTO Agreements Series

3. As regards paragraph 6 of Article 1 of that Agreement, applicants for scheduled tariff
quotas shall apply to one administrative body only.

4. As regards the matters referred to in paragraph 5(f) of Article 3 of that Agreement, the
period for processing applications shall be, unqualifiedly, no longer than 30 days for “as
and when received” cases and no longer than 60 days for “simultaneous” consideration
cases. The issuance of licences shall, therefore, take place no later than the effective
opening date of the tariff quota concerned, except where, for the latter category, there
has been an extension for applications allowed for under Article 1.6 of that Agreement.

5. As regards Article 3.5(i), licences for scheduled tariff quotas shall be issued in
economic quantities.

6. Tariff quota “fill rates” shall be notified.

7. In order to ensure that their administrative procedures are consistent with Article 3.2
of that Agreement, “no more administratively burdensome than absolutely necessary
to administer the measure”, importing Members shall ensure that unfilled tariff quota
access is not attributable to administrative procedures that are more constraining than
an “absolute necessity” test would demand.

8. Where licences held by private operators exhibit a pattern of being less than fully
utilized for reasons other than those that would be expected to be followed by a normal
commercial operator in the circumstances, the Member allocating the licences shall
give this due weight when examining the reasons for under utilization and considering
the allocation of new licences as provided for under Article 3.5 (j).

9. Where it is manifest that a tariff quota is under filled but there would appear to be
no reasonable commercial reason for this to be the case, an importing Member shall
request those private operators holding unused entitlements whether they would be
prepared to make them available to other potential users. Where the tariff quota is held
by a private operator in a third country, e.g. as a result of country-specific allocation
arrangements, the importing Member shall transmit the request to the holder of the
allocation concerned.

10. As regards Article 3.5(a)(ii) of that Agreement, Members shall make available the
contact details of those importers holding licences for access to scheduled agricultural
tariff quotas, where, subject to the terms of Article 1.11, this is possible and/or with
their consent.

11. The Committee on Agriculture shall review and monitor the implementation of
Members’ obligations established under this Understanding.

12. Members shall provide for an effective re-allocation mechanism in accordance with the
procedures outlined in the Annex A.

Agriculture 111
 13. A review of the operation of the Decision shall commence no later than four years
following the adoption of the Decision, taking into account experience gained up
to that time. The objective of this review will be to promote a continuing process of
improvement in the utilization of tariff rate quotas. In the context of this review the
General Council shall make recommendations to the 12th Ministerial Conference2,
including on whether, and if so how, paragraph 4 of Annex A should be re-affirmed or
modified for future operation.

14. The General Council recommendations in relation to paragraph 4 shall provide for
special and differential treatment. Unless the 12th Ministerial Conference decides to
extend paragraph 4 of Annex A in its current or a modified form, it shall, subject to
paragraph 15, no longer apply.

15. Notwithstanding paragraph 14, Members shall continue to apply the provisions of
paragraph 4 of Annex A in the absence of a decision to extend that paragraph, except
for those Members who wish to reserve their rights not to continue the application of
paragraph 4 of Annex A and who are listed in Annex B.

2 In the event the 12 th Ministerial Conference does not take place by 31 December 2019, the General
Council will take decisions on the recommendations arising from the review no later than 31 December 2019
unless Members agree otherwise.

ANNEX A
1. During the first monitoring year, where an importing Member does not notify the fill
rate, or where the fill rate is below 65 per cent, a Member may raise a specific concern
regarding a tariff quota commitment in the Committee on Agriculture and place this
concern on a tracking register maintained by the Secretariat. The importing Member
shall discuss the administration of the tariff quota with all interested Members, with the
aim of understanding the concerns raised, improving the membership’s understanding
of the market circumstances1 and of the manner in which the tariff quota is administered
and whether elements of the administration contribute to underfill. This shall take
place on the basis of provision of objective and relevant data bearing on the matter,
in particular as regards the market circumstances. The interested Members shall
fully consider all documentation submitted by the importing Member. 2 The importing
Member shall provide to the Committee on Agriculture a summary of any documentation
submitted to interested Members. The Members involved shall advise the Committee
on Agriculture whether the matter has been resolved. The interested Members shall,

1 The market circumstances considered may include, inter alia, elements of prices, production and other
factors affecting demand and supply in the domestic and international markets, as well as other relevant
factors affecting trade such as the existence of SPS measures taken by an importing Member in accordance
with the Agreement on Sanitary and Phytosanitary Measures.
2 Such documentation may include information on the administration of the tariff quota, as well as data
supporting the Member’s explanation of the market circumstances of the tariff quota in question and/or of
the existence of any SPS measures for the product in question.

112 WTO Agreements Series

 if the matter remains unresolved, provide to the Committee on Agriculture, a clear
statement of the reasons, based on the discussions and documentation provided,
why the matter requires further consideration. Such documentation and information
may also be provided and considered in the same manner during the second and
third stages of the underfill mechanism, as a means of addressing and resolving
Members’ concerns.

2. Once the underfill mechanism has been initiated, where the fill rate remains below
65 per cent for two consecutive years, or no notification has been submitted for
that period, a Member may request, through the Committee on Agriculture, that
the importing Member take specific action(s) 3 to modify the administration of the
tariff quota concerned. The importing Member shall take either the specific action(s)
requested or, drawing on the discussions previously held with the interested Members,
such other action(s) which it considers will effectively improve the fill rate of the tariff
quota. If the action(s) of the importing Member lead to a fill rate above 65 per cent or
interested Members are otherwise satisfied that lesser fill rates are indeed attributable
to market circumstances based on the data-based discussions that have taken place,
this will be noted and the concern marked “resolved” on the Secretariat’s tracking
register and will be no longer subject to monitoring (unless at some future point the
process is restarted but, if so, it will be a new three year cycle). If the fill rate remains
below 65 per cent, a Member may continue to request additional modifications to the
administration of the tariff quota.

3. During the third and subsequent monitoring years, where:

a. the fill rate has remained below 65 per cent for three consecutive years or no
notification has been submitted for that period; and

b. the fill rate has not increased, for each of the preceding three years, by annual
increments of

i. at least 8 percentage points when the fill rate is more than 40 per cent;

ii. at least 12 percentage points when the fill rate equals or is less than 40 per cent4; and

c. the data-based discussions regarding market circumstances have not led to the
conclusion among all interested parties these are in fact the reason for underfill; and

d. an interested Member makes a statement in the Committee on Agriculture, that it

wishes to initiate the final stage of the underfill mechanism.

3 The actions and remedies taken by the importing Member pursuant to the underfill mechanism shall
not modify or impede the rights of a Member holding a country-specific allocation for that tariff quota with
respect to their country-specific allocation.
4 If the fill rate in any year increases beyond the level specified in 3(b)(ii) the annual increment shall be the
one specified in 3(b)(i) in the following year.

Agriculture 113
 4. The importing Member shall then promptly provide unencumbered access via one of the
following tariff quota administration methods5: a first-come, first-served only basis (at the
border); or an automatic, unconditional license on demand system within the tariff quota. In
taking a decision on which of these two options to implement, the importing Member will
consult with interested exporting Members. The method selected shall be maintained by
the importing Member for a minimum of two years, after which time – provided that timely
notifications for the two years have been submitted – it will be noted on the Secretariat’s
tracking register and the concern marked “closed”. Developing country Members may
choose an alternative tariff quota administration method or maintain the current method
in place. This choice of an alternative tariff quota administration method shall be notified
to the Committee on Agriculture under the provisions of this mechanism. The method
selected shall be maintained by the importing Member for a minimum of two years, after
which time, if the fill rate has increased by two-thirds of the annual increments described
in paragraph 3(b), it will be noted on the Secretariat’s tracking register and the concern
marked “closed”.

5. The availability of this mechanism and resort to it by any Member is without prejudice to
Members’ rights and obligations under the covered Agreements in respect of any matter
dealt with under the mechanism and, in the event of any conflict, the provisions of the
covered agreements shall prevail.

_______________

ANNEX B
Barbados
Dominican Republic
El Salvador
Guatemala
United States of America

_______________

5 The actions and remedies taken by the importing Member shall not modify or impede the rights of
a Member holding a country-specific allocation for that tariff quota with respect to their country-specific
allocation.

114 WTO Agreements Series

Export Competition (Ministerial
Declaration WT/MIN(13)/40)
MINISTERIAL DECLARATION OF 7 DECEMBER 2013

1. We recognize that all forms of export subsidies and all export measures with equivalent
effect are a highly trade distorting and protectionist form of support, and that,
accordingly, export competition remains a key priority of the agriculture negotiations
in the context of the continuation of the ongoing reform process set out in Article 20
of the Agreement on Agriculture, in accordance with the Doha work programme on
agriculture and the 2005 Hong Kong Ministerial Declaration.

2. In this context, we therefore reaffirm our commitment, as an outcome of the

negotiations, to the parallel elimination of all forms of export subsidies and disciplines
on all export measures with equivalent effect, as set out in the 2005 Hong Kong
Ministerial Declaration. We regret that it has not been possible to achieve this objective
in 2013 as envisaged in that Declaration.

3. We consider that the revised draft modalities for agriculture (doc. TN/AG/W/4/Rev.4
dated 6 December 2008) remain an important basis for an ambitious final agreement
in the export competition pillar, including with regard to special and differential
treatment for LDCs and NFIDCs.

4. We recognize the decrease in recent years in the use of export subsidies subject
to reduction commitments under the Agreement on Agriculture, as indicated by
information contained in Members’ notifications to the WTO, and the positive
developments that have also taken place in other areas of the export competition pillar.

5. We recognize that the reforms undertaken by some Members have contributed to

this positive trend. We emphasize however that this generally positive trend is not a
substitute for the attainment of the final objective on export competition in the Doha
negotiations.

6. We emphasize the importance of consolidating progress in this area within the Doha
negotiations so as to achieve as soon as possible the final objective set out in the
2005 Hong Kong Ministerial Declaration and we underscore the importance of further
engagement among Members to this end.

7. We therefore reaffirm the importance of Members maintaining and advancing their

domestic reform processes in the field of export competition. We strongly encourage
those Members who have engaged in reforms to continue in that direction and
Members yet to undertake reforms to do so, given the positive impact that such
reforms can have and the significant negative consequences that failure to reform
would generate.

Agriculture 115
 8. With the objective on export competition set out in the 2005 Hong Kong Ministerial
Declaration in mind and with a view to maintaining the positive trend noted previously,
we shall exercise utmost restraint with regard to any recourse to all forms of export
subsidies and all export measures with equivalent effect. To this end, we undertake to
ensure to the maximum extent possible that:

• The progress towards the parallel elimination of all forms of export subsidies and
disciplines on all export measures with equivalent effect will be maintained;

• The level of export subsidies will remain significantly below the Members’ export
subsidy commitments;

• A similar level of discipline will be maintained on the use of all export measures
with equivalent effect.

9. We agree that fulfilling the objective set out in the 2005 Hong Kong Ministerial
Declaration on export competition remains a priority issue for the post Bali work
programme. We agree to continue to work actively for further concrete progress in this
area as early as feasible.

10. Accordingly, we commit to enhance transparency and to improve monitoring in relation

to all forms of export subsidies and all export measures with equivalent effect, in order
to support the reform process.

11. We therefore agree to hold dedicated discussions on an annual basis in the Committee
on Agriculture to examine developments in the field of export competition. This
examination process shall provide an opportunity for Members to raise any matter
relevant to the export competition pillar, in furtherance of the final objective set out in
the 2005 Hong Kong Ministerial Declaration.

12. This examination process shall be undertaken on the basis of timely notifications
under the relevant provisions of the Agreement on Agriculture and related decisions,
complemented by information compiled by the WTO Secretariat, consistent with the
practice followed in 20131, on the basis of Members’ responses to a questionnaire, as
illustrated in the Annex.

13. We agree to review the situation regarding export competition at the 10th Ministerial
Conference. We also agree that the terms of this declaration do not affect the rights
and obligations of Members under the covered agreements nor shall they be used to
interpret those rights and obligations.

1 TN/AG/S/27 and TN/AG/S/27/Rev.1.

116 WTO Agreements Series

ANNEX
Elements for Enhanced Transparency on Export
Competition
This Annex is intended to illustrate the types of information that would be requested by
the Secretariat in the questionnaire mentioned in paragraph 12. It is understood that this
questionnaire, which does not change Members’ notification obligations, may be revised in
the light of experience and of Members’ further views.

Export Subsidies

1. Provide information on operational changes in measures

Export Credit, Export Credit Guarantees or Insurance

Programs (Export financing)

1. Description of the program (classification within the following categories: direct financing
support, risk cover, government to government credit agreements or any other form of
governmental export credit support) and relevant legislation

2. Description of Export Financing Entity

3. Total value of export of agricultural products covered by export credits, export credit
guarantees or insurance programs and use per program

4. Annual average premium rates/fees per program

5. Maximum repayment terms per program

6. Annual average repayment periods per program

7. Export destination or group of destinations per program

8. Program use by product or product group

Food Aid

1. Product description

2. Quantity and/or value of food aid provided

Agriculture 117
 3. Description of whether food aid is provided on in-kind, untied cash-based basis and
whether monetisation was permitted

4. Description of whether in fully grant form or concessional terms

5. Description of relevant needs assessment (and by whom) and whether food aid is
responding to a declaration of emergency or an emergency appeal (and by whom)

6. Description of whether re-export of food aid is an option under the terms of the provision
of food aid

Agriculture Exporting State Trading Enterprises

1. Enumeration of State Trading Enterprises

• Identification of state trading enterprises

• Description of products affected (Including tariff item number(s) encompassed in

product description)

2. Reason and purpose

• Reason or purpose for establishing and/or maintaining state trading enterprise

• Summary of legal basis for granting the relevant exclusive or special rights or privileges,
including legal provisions and summary of statutory or constitutional powers

3. Description of the functioning of the State Trading Enterprise

• Summary statement providing overview of operations of the state trading enterprise

• Specification of exclusive or special rights or privileges enjoyed by the state trading

enterprise

Additional information subject to normal commercial confidentiality considerations

1. Exports (value/volume)

2. Export prices

3. Export destination

Information on Policies no Longer in Operation due to

Significant Policy Reforms
_______________

118 WTO Agreements Series

Cotton (Ministerial Decision
WT/MIN(13)/41)
MINISTERIAL DECISION OF 7 DECEMBER 2013

The Ministerial Conference,

Having regard to paragraph 1 of Article IX of the Marrakesh Agreement Establishing the

World Trade Organization;

Decides as follows:

1. We stress the vital importance of cotton to a number of developing country economies

and particularly the least-developed amongst them.

2. We reaffirm the Decision adopted by the General Council on 1 August 2004, the
2005 Hong Kong Ministerial Declaration, and our commitment, expressed at the
2011 Geneva WTO Ministerial Conference, to on-going dialogue and engagement to
progress the mandate in paragraph 11 of the 2005 Hong Kong Ministerial Declaration
to address cotton “ambitiously, expeditiously and specifically”, within the agriculture
negotiations.

3. We regret that we are yet to deliver on the trade-related components of the 2005
Hong Kong Ministerial Declaration, but agree on the importance of pursuing progress
in this area.

4. In that regard, we consider that the Decision adopted by the General Council on
1  August  2004 and the 2005 Hong Kong Ministerial Declaration, remain a useful
basis for our future work. We acknowledge the work on cotton that has been done in
the Committee on Agriculture in Special Session in connection with the revised draft
agriculture modalities contained in document TN/AG/W/4/Rev.4 dated 6 December
2008, which provides a reference point for further work.

5. In this context, we therefore undertake to enhance transparency and monitoring in

relation to the trade-related aspects of cotton. To this end, we agree to hold a dedicated
discussion on a bi-annual basis in the context of the Committee on Agriculture in
Special Session to examine relevant trade-related developments across the three
pillars of Market Access, Domestic Support and Export Competition in relation to
cotton.

6. The dedicated discussions shall be undertaken on the basis of factual information and
data compiled by the WTO Secretariat from Members’ notifications, complemented, as
appropriate, by relevant information provided by Members to the WTO Secretariat.

Agriculture 119
 7. The dedicated discussions shall in particular consider all forms of export subsidies for
cotton and all export measures with equivalent effect, domestic support for cotton
and tariff measures and non-tariff measures applied to cotton exports from LDCs in
markets of interest to them.

8. We reaffirm the importance of the development assistance aspects of cotton and

in particular highlight the work of the Director-General’s Consultative Framework
Mechanism on Cotton in reviewing and tracking of cotton-specific assistance as
well as infrastructure support programmes or other assistance related to the cotton
sector. We commit to continued engagement in the Director-General’s Consultative
Framework Mechanism on Cotton to strengthen the cotton sector in the LDCs.

9. We welcome the positive trend in growth and improved performance in the cotton
sector, particularly in Africa.

10. In this context, we underline the importance of effective assistance provided to LDCs
by Members and multilateral agencies. We invite the LDCs to continue identifying their
needs linked to cotton or related sectors, including on a regional basis, through their
respective dialogues with development partners and national development strategies.
We urge the development partners to accord special focus to such needs within
the existing aid-for-trade mechanisms/channels such as the EIF and the technical
assistance and capacity building work of relevant international institutions.

11. We invite the Director General to continue to provide periodic reports on the
development assistance aspects of cotton, and to report on the progress that has
been made in implementing the trade-related components of the 2005 Hong Kong
Ministerial Declaration, at each WTO Ministerial Conference.

120 WTO Agreements Series

 2015 Nairobi Package
on agriculture

Special Safeguard Mechanism

for Developing Country Members
(Ministerial Decision WT/MIN(15)/43,
WT/L/978)
MINISTERIAL DECISION OF 19 DECEMBER 2015

The Ministerial Conference,

Having regard to paragraph 1 of Article IX of the Marrakesh Agreement Establishing the

World Trade Organization;

In the context of addressing outstanding agricultural issues; and

Taking note of the proposals made by Members in this regard;

Decides as follows:

1. The developing country Members will have the right to have recourse to a special
safeguard mechanism (SSM) as envisaged under paragraph 7 of the Hong Kong
Ministerial Declaration.

2. To pursue negotiations on an SSM for developing country Members in dedicated

sessions of the Committee on Agriculture in Special Session (“CoA SS”).

3. The General Council shall regularly review progress in these negotiations.

Agriculture 121
 Public Stockholding for Food Security
Purposes (Ministerial Decision WT/
MIN(15)/44, WT/L/979)
MINISTERIAL DECISION OF 19 DECEMBER 2015

The Ministerial Conference,

Having regard to paragraph 1 of Article IX of the Marrakesh Agreement Establishing the

World Trade Organization; and

Taking note of the progress made so far;

Decides as follows:

1. Members note the Ministerial Decision of 7 December 2013 (WT/MIN(13)/38

and WT/L/913) and reaffirm the General Council Decision of 27  November  2014
(WT/L/939).

2. Members shall engage constructively to negotiate and make all concerted efforts to
agree and adopt a permanent solution on the issue of public stockholding for food
security purposes. In order to achieve such permanent solution, the negotiations on this
subject shall be held in the Committee on Agriculture in Special Session (“CoA SS”),
in dedicated sessions and in an accelerated time-frame, distinct from the agriculture
negotiations under the Doha Development Agenda (“DDA”).

3. The General Council shall regularly review the progress.

122 WTO Agreements Series

Export Competition (Ministerial
Decision WT/MIN(15)/45, WT/L/980)
MINISTERIAL DECISION OF 19 DECEMBER 2015

The Ministerial Conference,

Having regard to paragraph 1 of Article IX of the Marrakesh Agreement Establishing the

World Trade Organization;

Decides as follows:

General

1. Members reaffirm their commitment, pursuant to the 2013 Bali Ministerial Declaration
on Export Competition1, to exercise utmost restraint with regard to any recourse to all
forms of export subsidies and all export measures with equivalent effect.

2. Nothing in this Decision can be construed to give any Member the right to provide,
directly or indirectly, export subsidies in excess of the commitments specified in
Members’ Schedules, or to otherwise detract from the obligations of Article 8 of the
Agreement on Agriculture. Furthermore, nothing can be construed to imply any change
to the obligations and rights under Article 10.1 of the Agreement on Agriculture or to
diminish in any way existing obligations under other provisions of the Agreement on
Agriculture or other WTO Agreements.

3. Nor can anything in this Decision be construed to diminish in any way the existing
commitments contained in the Marrakesh Ministerial Decision of April 1994 on
Measures Concerning the Possible Negative Effects of the Reform Programme on
Least-developed and Net Food-importing Developing Countries and the Ministerial
Decision of 14  November 2001 on Implementation-related Issues and Concerns2
on, inter alia, commitment levels of food aid, provision of food aid by donors, technical
and financial assistance in the context of aid programmes to improve agricultural
productivity and infrastructure, and financing normal levels of commercial imports
of basic foodstuffs. Nor could it be understood to alter the regular review of these
decisions by the Ministerial Conference and monitoring by the Committee on
Agriculture.

4. The Committee on Agriculture shall monitor the implementation of this Decision by

Members in accordance with existing notification requirements under the Agreement
on Agriculture, as complemented by the provisions set out in the Annex to this Decision.

1 Document WT/MIN(13)/40 and WT/L/915.

2 Document WT/MIN(01)/17.

Agriculture 123
 5. The regular sessions of the Committee on Agriculture shall review every three years
the disciplines contained in this Decision, with the aim of enhancing disciplines to
ensure that no circumvention threatens export subsidy elimination commitments
and to prevent non-commercial transactions from being used to circumvent such
commitments.

Export Subsidies

6. Developed Members shall immediately eliminate their remaining scheduled export

subsidy entitlements as of the date of adoption of this Decision. 3,4

7. Developing country Members shall eliminate their export subsidy entitlements by the
end of 2018.5

8. Developing country Members shall continue to benefit from the provisions of Article 9.4
of the Agreement on Agriculture until the end of 2023, i.e. five years after the end-
date for elimination of all forms of export subsidies. Least developed countries and net
food‑importing developing countries listed in G/AG/5/Rev.10 shall continue to benefit
from the provisions of Article  9.4 of the Agreement on  Agriculture until the end of
2030.

9. Members shall not apply export subsidies in a manner that circumvents the requirement
to reduce and eliminate all export subsidies.

10. Members shall seek not to raise their export subsidies beyond the average level of the
past five years on a product basis.

11. Members shall ensure that any export subsidies have at most minimal trade distorting
effects and do not displace or impede the exports of another Member. To that effect,
Members using export subsidies shall give due consideration to the effects of any such
export subsidies on other Members, and shall consult, upon request, with any other

3 This paragraph shall not cover quantities counted against export subsidy reduction commitments found
to exist by the Dispute Settlement Body in its recommendations and rulings adopted in disputes DS265,
DS266, and DS283, with respect to the existing programme, which expires on 30 September 2017, for the
product concerned by those disputes.
4 This paragraph shall not cover processed products, dairy products, and swine meat of a developed
Member that agrees to eliminate as of 1 January 2016 all export subsidies on products destined for least
developed countries, and that has notified export subsidies for such products or categories of products in
one of its three latest export subsidy notifications examined by the Committee on Agriculture before the
date of adoption of this Decision. For these products, scheduled export subsidies shall be eliminated by the
end of 2020, and quantity commitment levels shall be applied as a standstill until the end of 2020 at the
actual average of quantity levels of the 2003-05 base period. Furthermore, there shall be no export subsidies
applied either to new markets or to new products.
5 Notwithstanding this paragraph, a developing country Member shall eliminate its export subsidy
entitlements by the end of 2022 for products or groups of products for which it has notified export subsidies
in in one of its three latest export subsidy notifications examined by the Committee on Agriculture before the
date of adoption of this Decision.

124 WTO Agreements Series

 Member having a substantial interest as an exporter with respect to any matter related
to the export subsidies in question. The Member applying such export subsidies shall
provide, upon request, such a Member with necessary information.

Cotton

12. With regard to cotton, the disciplines and commitments contained in this Decision shall
be immediately implemented as of the date of adoption of this Decision by developed
country Members, and not later than 1 January 2017 by developing country Members.

Export Credits, Export Credit Guarantees or

Insurance Programmes

Definition

13. In addition to complying with all other export subsidy obligations under the Agreement
on Agriculture and any other covered Agreements6, Members undertake not to provide
export credits7, export credit guarantees or insurance programmes for exports of
products listed in Annex  1 of the Agreement on Agriculture (hereafter “agricultural
products”) other than in conformity with this Decision. These  export credits, export
credit guarantees and insurance programmes (hereafter “export financing support”)
comprise:

(a) direct financing support, comprising direct credits/financing, refinancing, and

interest rate support;

(b) risk cover, comprising export credit insurance or reinsurance and export credit
guarantees;

(c) government-to-government credit agreements covering the imports of

agricultural products from the creditor country under which some or all of the
risk is undertaken by the government of the exporting country; and

(d) any other form of governmental export credit support, direct or indirect,
including deferred invoicing and foreign exchange risk hedging.

14. The provisions of this Decision shall apply to export financing support as defined
in paragraph 13 provided by a government or any public body as referred to in
Article 1.1(a)1 of the Agreement on Subsidies and Countervailing Measures.

6 However, the second paragraph of item (k) of Annex I to the Agreement on Subsidies and Countervailing
Measures (hereafter “Illustrative List”) shall not be applicable in the case of agricultural products.
7 The export credits defined in this paragraph do not include working capital financing to the suppliers.

Agriculture 125
 Terms and Conditions

15. Export financing support shall be provided in conformity with the terms and conditions
set out below:

(a) Maximum repayment term: the maximum repayment term for export financing
support under this Decision, this being the period beginning at the starting point of
credit8 and ending on the contractual date of the final payment, shall be no more than
18 months. For developed Members, this shall apply from the last day of 2017. Existing
contracts which have been entered into prior to the adoption of this Decision, are still
in place, and are operating on a longer timeframe than that defined in the preceding
sentence, shall run their course until the end of their contractual date, provided that
they are notified to the Committee on Agriculture and are not modified;

(b) Self-financing: Export credit guarantee, insurance and reinsurance programmes

and other risk cover programmes included within sub-paragraphs 13(b), (c) and (d)
above shall be self-financing and cover the long-term operating costs and losses of a
programme in the sense of item (j) of the Illustrative List of Annex I of the Agreement
on Subsidies and Countervailing Measures. For the operations covered in the previous
sentence, premiums shall be charged and be risk-based.

Special and Differential Treatment

16. Developing country Member providers of export financing support shall be eligible to
benefit from the following:

Maximum repayment terms: the developing country Members concerned shall

have a phase-in period of four years after the first day of the implementation period9 by
the end of which to fully implement the maximum repayment term of 18 months. This
shall be achieved as follows:

(a) on the first day of implementation, the maximum repayment term for any new
support entered into shall be 36 months;

(b) two years after implementation, the maximum repayment term for any new
support to be entered into shall be 27 months;

(c) four years after implementation, the maximum repayment term of 18 months
shall apply.

8 The “starting point of credit” shall be no later than the weighted mean date or actual date of the arrival
of the goods in the recipient country for a contract under which shipments are made in any consecutive six-
month period.
9 For the purposes of this paragraph, implementation period shall be defined as the period commencing in
the year 2016 and ending on 31 December 2020.

126 WTO Agreements Series

 It is understood that where there are, after any of the relevant dates, pre-
existing support arrangements entered into under the limits established in the
sub-paragraphs (a)-(c) above, they shall run their original term.

17. Notwithstanding the terms of paragraphs 15(a) and 16 above, least-developed and
net food-importing developing countries listed in G/AG/5/Rev.10 shall be accorded
differential and more favourable treatment comprising allowance for a repayment
term in respect of them of  between 36 and 54 months, for the acquisition of basic
foodstuffs.10 Should one of these Members face exceptional circumstances which
still preclude financing normal levels of commercial imports of basic foodstuffs and/
or in accessing loans granted by multilateral and/or regional financial institutions
within these timeframes, it shall have an extension of such a time-frame. The standard
monitoring and surveillance provisions, as resulting from this Decision, shall apply to
these cases.11

Agricultural Exporting State Trading Enterprises

18. Members shall ensure that agricultural exporting state trading enterprises are operated
in conformity with the provisions specified in paragraphs 20 and 21, in accordance with
Article XVII, the Understanding on the Interpretation of Article XVII and other relevant
provisions of GATT 1994, the Agreement on Agriculture and other WTO Agreements.

19. For the purpose of the disciplines set out hereunder in this Decision, an agricultural
exporting state trading enterprise shall be any enterprise which meets the working
definition provided for in the Understanding on the Interpretation of Article XVII of the
GATT 1994 and is engaged in exports of products listed in Annex 1 of the Agreement
on Agriculture.12

20. Members shall ensure that agricultural exporting state trading enterprises do not
operate in a manner that circumvents any other disciplines contained in this Decision.

21. Members shall make their best efforts to ensure that the use of export monopoly
powers by agricultural exporting state trading enterprises is exercised in a manner that
minimizes trade distorting effects and does not result in displacing or impeding the
exports of another Member.

10 Belize, the Plurinational State of Bolivia, Ecuador, Fiji, Guatemala, Guyana, Nicaragua, Papua New
Guinea and Suriname shall also have access to this provision.
11 In the event that Cuba is a recipient Member in this situation, the time-frame can be greater than
54  months and any such monitoring and surveillance shall not apply without the prior express consent of
Cuba.
12 “Governmental and non-governmental enterprises, including marketing boards, which have been granted
exclusive or special rights or privileges, including statutory or constitutional powers, in the exercise of which
they influence through their purchases or sales the level or direction of imports or exports.” It is understood
that where there is reference to the “rights and privileges” that “influence … the level or direction of imports”
in the preceding sentence, this matter of imports is not per se a matter falling under the disciplines of this
Decision which relates, rather, solely to the matter of exports under that working definition.

Agriculture 127
 International Food Aid

22. Members reaffirm their commitment to maintain an adequate level of international

food aid, to take account of the interests of food aid recipients and to ensure that
the disciplines contained hereafter do not unintentionally impede the delivery of food
aid provided to deal with emergency situations. To meet the objective of preventing
or minimizing commercial displacement, Members shall ensure that international food
aid is provided in full conformity with the disciplines specified in paragraphs 23 to 32,
thereby contributing to the objective of preventing commercial displacement.

23. Members shall ensure that all international food aid is:

a. needs-driven;

b. in fully grant form;

c. not tied directly or indirectly to commercial exports of agricultural products or

other goods and services;

d. not linked to the market development objectives of donor Members;

and that

e. agricultural products provided as international food aid shall not be re-exported

in any form, except where the agricultural products were not permitted
entry into the recipient country, the agricultural products were determined
inappropriate or no longer needed for the purpose for which they were received
in the recipient country, or re-exportation is necessary for logistical reasons
to expedite the provision of food aid for another country in an emergency
situation. Any re-exportation in accordance with this subparagraph shall be
conducted in a manner that does not unduly impact established, functioning
commercial markets of agricultural commodities in the countries to which the
food aid is re-exported.

24. The provision of food aid shall take into account local market conditions of the same or
substitute products. Members shall refrain from providing in-kind international food aid
in situations where this would be reasonably foreseen to cause an adverse effect on
local13 or regional production of the same or substitute products. In addition, Members
shall ensure that international food aid does not unduly impact established, functioning
commercial markets of agricultural commodities.

25. Where Members provide exclusively cash-based food aid, they are encouraged
to continue to do so. Other Members are encouraged to provide cash-based or in-

13 The term “local” may be understood to mean at the national or subnational level.

128 WTO Agreements Series

 kind international food aid in emergency situations, protracted crises (as defined
by the FAO14), or non-emergency development/capacity building food assistance
environments where recipient countries or recognized international humanitarian/food
entities, such as the United Nations, have requested food assistance.

26. Members are also encouraged to seek to increasingly procure international food aid
from local or regional sources to the extent possible, provided that the availability and
prices of basic foodstuffs in these markets are not unduly compromised.

27. Members shall monetize international food aid only where there is a demonstrable
need for monetization for the purpose of transport and delivery of the food assistance,
or the monetization of international food aid is used to redress short and/or long term
food deficit requirements or insufficient agricultural production situations which give
rise to chronic hunger and malnutrition in least-developed and net food-importing
developing countries.15

28. Local or regional market analysis shall be completed before monetization occurs for
all monetized international food aid, including consideration of the recipient country’s
nutritional needs, local United Nations Agencies’ market data and normal import and
consumption levels of the commodity to be monetized, and consistent with Food
Assistance Convention reporting. Independent third party commercial or non-profit
entities will be employed to monetize in-kind international food aid to ensure open
market competition for the sale of in-kind international food aid.

29. In employing these independent third party commercial or non-profit entities for
the purposes of the preceding paragraph, Members shall ensure that such entities
minimize or eliminate disruptions to the local or regional markets, which may include
impacts on production, when international food aid is monetized. They shall ensure that
the sale of commodities for food assistance purposes is conducted in a transparent,
competitive and open process and through a public tender.16

30. Members commit to allowing maximum flexibility to provide for all types of international
food aid in order to maintain needed levels while making efforts to move toward more
untied cash-based international food aid in accordance with the Food Assistance
Convention.

31. Members recognize the role of government in decision-making on international food

aid in their jurisdictions. Members recognize that the government of a recipient country
of international food aid can opt out of the usage of monetized international food aid.

14 FAO defines protracted crises as follows: “Protracted crises refer to situations in which a significant
portion of a population is facing a heightened risk of death, disease, and breakdown of their livelihoods.”
15 Belize, the Plurinational State of Bolivia, Ecuador, Fiji, Guatemala, Guyana, Nicaragua, Papua New
Guinea and Suriname shall also have access to this provision.
16 In the instance where it is not feasible to complete a sale through a public tender, a negotiated sale can
be used.

Agriculture 129
 32. Members agree to review the provisions on international food aid contained in the
preceding paragraphs within the regular Committee on Agriculture monitoring of the
implementation of the Marrakesh Ministerial Decision of April 1994 on Measures
Concerning the Possible Negative Effects of the Reform Programme on Least-
developed and net food-importing developing countries.

ANNEX17
Export Subsidies

Consistent with the Bali Ministerial Declaration on Export Competition18 and in addition
to annual notifications requirements under the relevant provisions of the Agreement on
Agriculture and related decisions, Members shall continue to provide information on export
subsidies within the context of an annual examination process, based on the following
structure:

1. Provide information on operational changes in measures

Export Credit, Export Credit Guarantees or Insurance

Programs (Export Financing)

Consistent with the Bali Ministerial Declaration on Export Competition, Members shall
continue to provide information on Export Credit, Export Credit Guarantees or Insurance
Programs within the context of an annual examination process, based on the following
structure:

1. Description of the program (classification within the following categories: direct

financing support, risk cover, government to government credit agreements or any
other form of governmental export credit support) and relevant legislation

2. Description of Export Financing Entity

3. Total value of export of agricultural products covered by export credits, export credit
guarantees or insurance programs and use per program

4. Annual average premium rates/fees per program

17 Notwithstanding paragraph 4 of this Decision, developing country Members, unless they are in a position
to do so at an earlier date, shall implement this Annex no later than five years following the date of adoption of
this Decision.
18 Decision WT/MIN(13)/40 and WT/L/915.

130 WTO Agreements Series

5. Maximum repayment terms per program

6. Annual average repayment periods per program

7. Export destination or group of destinations per program

8. Program use by product or product group

Food Aid

Consistent with the Bali Ministerial Declaration on Export Competition, Members shall
continue to provide information on International Food Aid within the context of an annual
examination process, based on the following structure:

1. Product description

2. Quantity and/or value of food aid provided

3. Description of whether food aid is provided on in-kind, untied cash-based basis and
whether monetisation was permitted

4. Description of whether in fully grant form or concessional terms

5. Description of relevant needs assessment (and by whom) and whether food aid is
responding to a declaration of emergency or an emergency appeal (and by whom)

6. Description of whether re-export of food aid is an option under the terms of the
provision of food aid

Agricultural Exporting State Trading Enterprises

Consistent with the Bali Ministerial Declaration on Export Competition, Members shall
continue to provide information on Agricultural Exporting State Trading Enterprises within the
context of an annual examination process, based on the following structure:

1. Enumeration of State Trading Enterprises

• Identification of state trading enterprises

• Description of products affected (Including tariff item number(s) encompassed in

product description)

Agriculture 131
 2. Reason and purpose

• Reason or purpose for establishing and/or maintaining state trading enterprise

• Summary of legal basis for granting the relevant exclusive or special rights or
privileges, including legal provisions and summary of statutory or constitutional
powers

3. Description of the functioning of the State Trading Enterprise

• Summary statement providing overview of operations of the state trading enterprise

• Specification of exclusive or special rights or privileges enjoyed by the state trading

enterprise

Additional information subject to normal commercial confidentiality considerations

1. Exports (value/volume)

2. Export prices

3. Export destination

132 WTO Agreements Series

Cotton (Ministerial Decision WT/
MIN(15)/46, WT/L/981)
MINISTERIAL DECISION OF 19 DECEMBER 2015
The Ministerial Conference,

Having regard to paragraph 1 of Article IX of the Marrakesh Agreement Establishing the

World Trade Organization;

Stressing the vital importance of cotton to a number of developing economies and particularly
the least-developed amongst them, and noting that over the past few years cotton has been
one of the most contentious issues at the World Trade Organization (WTO), both in the trade
negotiations and in the framework of the dispute settlement process;

Recalling that export subsidies and all export measures with equivalent effect and trade
distorting domestic support for cotton by WTO Members distort prices and disrupt
international cotton markets, with severe consequences for the economy and social lives in
African cotton‑producing countries, especially Least Developed Countries (LDCs);

Recalling that on several occasions, the Cotton Four (C‑4)1 has stressed the need for
progress as regards the commitment of WTO Trade Ministers and has shown its good will in
seeking to build a credible consensus through negotiation;

Expressing their concern at the lack of progress in the cotton negotiations and the absence
of clearly-stated political determination in the trade component of this vital issue since 2003,
when the Sectoral Initiative in Favour of Cotton was submitted to the WTO;

Taking into account the context that has prevailed in recent years and of the trend in world
cotton prices, which has been highly unfavourable for cotton producers and exporters, and in
particular African ones, over the past two years;

Considering the 1979 Decision on Differential and More Favourable Treatment, Reciprocity
and Fuller Participation of Developing Countries (L/4903), the 1994 Ministerial Decision on
Measures in Favour of Least-Developed Countries and the 2009 Decision on Preferential
Tariff Treatment for Least Developed Countries (WT/L/759), and without prejudice to the
right of Members to continue to act pursuant to the provisions contained in those Decisions;
and

Taking into account the 2010 Decision on the Transparency Mechanism for Preferential
Trade Arrangements (WT/L/806).

1 Benin, Burkina Faso, Chad and Mali.

Agriculture 133
 Decides as follows:

1. Trade Component

1.1 Market access

1. We welcome the progress made voluntarily by some Members towards providing duty-
free and quota-free market access for cotton and cotton-related products originating
from LDCs.

2. Developed country Members, and developing country Members declaring themselves

in a position to do so, shall grant, to the extent provided for in their respective
preferential trade arrangements2 in favour of LDCs, as from 1 January 2016, duty‑free
and quota‑free market access for cotton produced and exported by LDCs.

3. Developing country Members declaring themselves not in a position to grant duty‑free

and quota‑free market access for cotton produced and exported by LDCs shall
undertake, as from 1 January 2016, to consider the possibilities for increased import
opportunities for cotton from LDCs.

4. Developed country Members, and developing country Members declaring themselves

in a position to do so, shall  grant, to the extent provided for in their respective
preferential trade arrangements2 in favour of LDCs, as from 1 January 2016, duty‑free
and quota‑free market access for exports by LDCs of relevant cotton-related products
included in the list annexed to this Decision and covered by Annex 1 of the Agreement
on Agriculture.

5. We agree to review the list annexed to this Decision in the Dedicated Discussions on
cotton referred to in paragraph 14 of this Decision within two years, on the basis of
updated trade statistics provided by Members on their imports from LDCs.

6. The Dedicated Discussions on cotton referred to in paragraph 14 of this Decision shall

continue to address the following specific elements, based on factual information and
data compiled by the WTO Secretariat from Members’ notifications, complemented, as
appropriate, by relevant information provided by Members to the WTO Secretariat:

(a) identification and examination of market access barriers, including tariff

and non‑tariff barriers for the entry of cotton produced and exported by
cotton‑producing LDCs;

2 In this regard, China declares itself in a position to do so to the extent provided for in its preferential
trade arrangements and political commitments.

134 WTO Agreements Series

 (b) reviews of market access improvements and of any market access measures
undertaken by Members, including the identification of  access barriers
to cotton produced and exported by cotton‑producing LDCs in markets
of interest to them; and

(c) examination of possible additional measures for progressive and predictable

improvements in market access, in particular the elimination of tariff and
non‑tariff barriers to cotton produced and exported by cotton‑producing LDCs.

1.2 Domestic support

7. We acknowledge the efforts made by some Members to reform their domestic cotton
policies and which may contribute to the objective of reduction of the trade distorting
domestic subsidies for cotton production.

8. We emphasize however that some more efforts remain to be made and that these
positive steps are not a substitute for the attainment of our objective. In doing so,
Members shall ensure that necessary transparency is provided through regular
notifications and the subsequent review process in the Committee on Agriculture.

1.3 Export competition

9. The disciplines and commitments contained in the Ministerial Decision on Export

Competition (WT/MIN(15)/45-WT/L/980 adopted on 19 December 2015) shall be
immediately implemented with regard to cotton by developed country Members as of
the date of adoption of that Decision, and by developing country Members not later
than 1 January 2017.

2. Development Component

10. We reaffirm the importance of the development assistance aspects of cotton, and
commit to continued engagement in the Director-General’s Consultative Framework
Mechanism on Cotton. We take note of the Director-General’s seventh periodic
report to the Membership on the development assistance aspects of cotton. We invite
the Director-General to submit the next periodic report prior to the 11th Ministerial
Conference.

11. We underline the importance of effective assistance to support the cotton sector
in developing country Members, especially the LDCs amongst them. We recognize
that the Aid-for-Trade (AfT) initiative, including through the Enhanced Integrated
Framework (EIF), should play a key role in strengthening the cotton sector in LDCs.
The linkage between this initiative and the development aspects of cotton should
be reinforced to help formulate, on the basis of priorities identified by LDC cotton

Agriculture 135
 producers, multidimensional and integrated programmes and projects at the regional
and sub-regional level, to be submitted to development partners.

12. We urge WTO Members and development partners to continue their efforts and
contributions to enhance the production, productivity and competitiveness of the
cotton sector in developing country Member producers, especially the LDCs. Likewise,
the beneficiaries of cotton development assistance are encouraged to continue
carrying forward their domestic cotton sector reforms.

13. We recognize the importance of the role of Cotton Focal Points and encourage
Members to enhance the experiences and information sharing amongst all interested
parties in the cotton dossier.

3. Implementation and Follow‑up

14. We undertake to continue holding Dedicated Discussions on cotton on a bi-annual

basis, as indicated in paragraphs 5, 6 and 7 of the Bali Ministerial Decision on Cotton
(WT/MIN(13)/41 and WT/L/916), including in particular to examine relevant trade-
related developments across the three pillars of Market Access, Domestic Support,
and Export Competition in relation to cotton.

15. We undertake to regularly monitor the implementation by Members of paragraphs

2 to 4 during these Dedicated Discussions on cotton, based on relevant Members’
notifications to the WTO, complemented as necessary by Members’ replies to specific
requests for information from the WTO Secretariat.

16. We agree to review the situation regarding cotton at the 11th Ministerial Conference,
which we have agreed to hold in 2017, and we invite the Director-General to report
at that Conference on the progress that has been made in implementing the trade-
related components of this Decision.

136 WTO Agreements Series

 ANNEX: LIST3
Harmonized System 2012
(In shadow: rows corresponding to HS6 tariff lines)
Cotton 520100 Cotton, not carded or combed
5202 Cotton waste (including yarn waste and garnetted stocks)
520210 - Yarn waste (including thread waste)
  - Other
520291 -- Garnetted stock
520299 -- Other
520300 Cotton, carded or combed
1207 Other oil seeds and oleaginous fruits, whether or not broken
  - Cotton seeds
120721 -- Seed
120729 -- Other
1404 Vegetable products not elsewhere specified or included
140420 - Cotton linters
Sunflower-seed, safflower or cotton-seed oil and fractions
1512
thereof, whether or not refined, but not chemically modified
  - Cotton-seed oil and its fractions
151221 -- Crude oil, whether or not gossypol has been removed
151229 -- Other
Cotton shells, Vegetable waxes (other than triglycerides), beeswax, other
husks, oil and 1521 insect waxes and spermaceti, whether or not refined or
other food coloured
products
152110 - Vegetable waxes
Oil-cake and other solid residues, whether or not ground or in
2306 the form of pellets, resulting from the extraction of vegetable
fats or oils, other than those of heading 23.04 or 23.05
230610 - Of cotton seeds
Provitamins and vitamins, natural or reproduced by synthesis
(including natural concentrates), derivatives thereof used
2936
primarily as vitamins, and intermixtures of the foregoing,
whether or not in any solvent
  - Vitamins and their derivatives, unmixed
-- D
 - or DL-Pantothenic acid (Vitamin B3 or Vitamin B5) and
293624
its derivatives
293628 -- Vitamin E and its derivatives

3 This list does not alter Members’ existing WTO obligations and requirements.

Agriculture 137
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Sanitary and Phytosanitary Measures
© World Trade Organization
Technical Barriers to Trade Revised in 2016
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